We investigate whether confidence of management teams, defined as the certainty about handling something, affects the capacity of firms to raise external capital. Drawing from psychology research, we run an experiment in which participants are asked to assess the confidence of management teams...

This paper investigates the effect of external financing on earnings management in Vietnam, a bank-dominated economy. Using a sample of 494 listed non-financial firms from 2009 to 2018, we find that external financing is positively related to earnings management, implying that firms have...

To what extent can private firms' external equity substitute for debt financing in a banking crisis? To answer this question, I use firm-level data and firm-bank linkages to estimate the causal effect of an imported lending cut from a large German bank on firms' capital structure and real...

Existing theories of a firm’s optimal capital structure seem to fail in explaining why many healthy and profitable firms rely heavily on equity financing, even though benefits associated with debt (like tax shields) appear to be high and the bankruptcy risk low. This holds in particular for...

Existing theories of a firm's optimal capital structure seem to fail in explaining why many healthy and profitable firms rely heavily on equity financing, even though benefits associated with debt (like tax shields) appear to be high and the bankruptcy risk low. This holds in particular for...

Existing theories of a firm's optimal capital structure seem to fail in explaining why many healthy and profitable firms rely heavily on equity financing, even though benefits associated with debt (like tax shields) appear to be high and the bankruptcy risk low. This holds in particular for...

I study the relationship between debt maturity and agency conflicts between controlling and minority shareholders in unlisted firms. Exploiting cross-provinces variance in the development of local credit markets, I find a negative joint effect of ownership concentration and short-term bank debt...

In this article, we examine how startup firms finance their operations over time. We empirically test the financial growth cycle theory developed by Berger and Udell (1998) using the Kauffman Firm Survey data, the largest longitudinal data set comprised of all U.S. startups launched in 2004....

By imposing a market like governance and directing entrepreneurs towards professional management, debt, and especially business debt, can serve as a reliable signal for outside equity investors. Such signals of firm accountability can alleviate the stringent information asymmetry at the early...

Venture debt, or loans to rapid-growth start-ups, is a puzzle. How are start-ups with no track records, positive cash flows, tangible collateral, or personal guarantees from entrepreneurs able to attract billions of dollars in loans each year? And why do start-ups take on debt rather than rely...