Share repurchases have become persistent. Firms use cash flow as the primary source of capital to finance repeated share repurchases. This internal financing increases (decreases) retained earnings (paid-in-capital) in the capital structure and weakens the sensitivity of investment to cash flow....

We explore the forces that drive cash savings in equity issuance using the average cash-savings rate instead of the marginal cash-savings rate that overstates individual issuers’ cash savings. Equity issuers with high investment opportunities save more cash in anticipation of greater cash...

We examine how corporate environmental responsibility (CER) affects the cost of equity capital for manufacturing firms in 30 countries. Using several approaches to estimate firms' ex ante equity financing costs, we find in regressions that control for firm-level characteristics as well as...

We examine the influence of institutional investors' investment horizons on a firm's cost of equity. We argue that the cost of equity will decrease in the presence of institutional investors with longer-term investment horizons due to improved monitoring and information quality. Our empirical...

We examine the effects of organization capital — evident in management quality practices — on firms' implied cost of equity. We show that superior management practices decrease firms' cost of equity capital. This novel finding, robust to a battery of sensitivity analyses and to endogeneity...

We examine the effect of economic policy uncertainty on the relation between investment and the cost of capital. Using the news-based index developed by Baker, Bloom, and Davis (2016) for twenty-one countries, we find that the strength of the negative relation between investment and the cost of...

Research on capital structure and product market interactions shows that high leverage is associated with substantial losses in market share due to unfavorable actions by customers and competitors. We examine whether corporate social responsibility (CSR) affects firms' interactions with...

In this paper we examine how corporate environmental responsibility (CER) affects the cost of equity capital for manufacturing firms in 30 countries. Using several approaches to estimate firms’ ex ante equity financing costs, we find in regressions that control for firm-level characteristics...

We examine the effect of corporate social responsibility (CSR) on the cost of equity capital for a large sample of U.S. firms. Using several approaches to estimate firms' ex ante cost of equity, we find that firms with better CSR rankings exhibit cheaper equity financing. In particular, our...

We examine whether a firm’s operating inflexibility affects its carbon footprint. Using a large sample of firms from 30 countries over the 2003–2021 period, we provide first evidence that operating inflexibility reduces firms’ greenhouse gas (GHG) emissions. The negative effect of...