Surprisingly little is known about the business cycle dynamics of leverage. The existing evidence documents that target leverage evolves pro-cyclically either for all firms or financially constrained ones. In contrast, we show that, on average, target leverage ratios evolve counter-cyclically...

We find that bond issues increased substantially since the onset of the COVID-19 crisis in calendar week 12 (March 16-20) for bonds rated A or higher, but surprisingly also for bonds rated BBB or lower. In contrast to existing evidence on bond maturities in economic downturns, we document that...

We document that good ES-performance is rewarded in primary bond markets by lower credit spreads. This effect is strongest for low-rated bonds and for firms in manufacturing, agriculture, mining and construction. However, not all ES-dimensions are equally important. The above results are driven...

We find that US public firms spread out their debt more across different sources in recession quarters, making measures of debt concentration move pro-cyclically, on average. There is substantial cross-sectional variation in these dynamics. In particular, firms with already low leverage and high...

This paper presents different social preferences and their impact on investors' and firms' decisions within a unified framework. We categorize preferences into three types: deontological, non-consequentialist, and consequentialist. When investors are large, all three preferences influence...

This paper develops a dynamic general equilibrium model with stochastic social preferences and endogenous corporate investment decisions. We find that firms’ investment decisions largely undo the effects of shifts in preferences on stock prices and risk premia. Only when most firms have...