In order to identify the relevant sources of firms' financing constraints, we ask what financial frictions matter for … corporate policies. To that end, we build, solve, and estimate a range of dynamic models of corporate investment and financing … common technology, but differ in the friction generating financing constraints. Using panel data on Compustat firms for the …

financing and hoard cash reserves to maintain financial flexibility. We show that financing frictions slow down Schumpeterian … creative destruction by discouraging entry. As a result, financing frictions importantly affect the composition of growth, by …

How does product life cycle affect investment and financing? To answer this question, we structurally estimate a …, investment and financing, and has materially important valuation effects. In particular, we show that product introductions and …

We develop a model of investment, payout, and financing policies in which firms face uncertainty regarding their … between retention and payout, between internal or external financing of investment, and between speculation and hedging. In …

We build a model of investment and financing decisions to study the choice between bonds and bank loans in a firm …'s marginal financing decision and its effects on corporate investment. We show that firms with more growth options, higher … issue bonds. We also demonstrate that, by changing the cost of financing, these characteristics affect the timing of …

Using a dynamic model of financing, investment, and macroeconomic risk, we investigate when firms sell assets to fund … investments (financing asset sales) across the business cycle. Equity financed investment transfers wealth from equity to debt … because asset volatility declines and earnings increase when firms invest. Financing asset sales reduce asset collateral and …

Lending relationships matter for firm financing. In a model of debt dynamics, we study how lending relationships are … relationship lenders drastically affect the financing choices of firms with intermediate relationship quality …

choices are too small to explain financing decisions. We also show that by adding agency conflicts in the model and giving the …