We document that leased capital accounts for over 30\% of the total productive physical assets used by US public firms. We develop an analytical framework to show how ignoring this important proportion generates an overestimation of productivity. Such overestimation can be decomposed into two...

This paper argues that leasing, as an important but often ignored source of external financing, facilitates the allocation efficiency of finance. We document a large overestimation of measured finance misallocation (Whited and Zhao, 2021) when lease-induced debt is ignored among US manufacturing...

In this paper, we argue that leasing is an important alternative way of capital reallocation. We propose a broader measure of capital reallocation, which not only includes asset purchase and sale, but also considers lease. Empirically, we show that the lease-induced reallocation component is...

In this paper, we argue that leasing is an important alternative way of capital reallocation, complementary to directly purchasing capital from the reallocation market, and it significantly mitigates credit-constraint-induced capital misallocation. However, in the existing literature, leased...

We study how leasing plays a novel role in improving total factor productivity (TFP) by facilitating entry and technology adoption. As a form of more collateralizable financing, leasing provides additional financing for investment required in a productive sector, and raises the expected...

We document that leased capital accounts for over 30% of the total productive physical assets used by US public firms. We develop an analytical framework to show how ignoring this important proportion generates an overestimation of productivity. Such overestimation can be decomposed into two...

This paper argues that leasing, as an important but often ignored source of external financing, facilitates the allocation efficiency of finance. We document a large overestimation of measured finance misallocation (Whited and Zhao, 2021) when lease-induced debt is ignored among US manufacturing...