This paper presents a procedure for computing the theoretically optimal portfolio under the assumption that housing is an indivisible, illiquid asset that restricts the portfolio choice decision. The analysis also includes the financial constraints households may face when they apply for...

We investigate the empirical linkages between sales uncertainty and firms’ inventory investment behavior while controlling for firms’ financial strength. Using large panels of manufacturing firms from several European countries we find that higher sales uncertainty leads to larger stocks of...

By exploring a rich dataset that links international trade transactions to a panel of Italian manufacturing firms, this paper provides new evidence on the role of financial constraints on price variations across exporting firms. After controlling for relevant firm characteristics and potential...

This paper investigates the importance of accessing public capital markets through an initial public offering (IPO), and the consequent relaxation of firms’ financial constraints, for firm-level long term employment decisions. We find that firms significantly increase post-IPO investment in...

Financial constraints are fundamental to empirical research in finance and economics. We propose two novel tests to evaluate how well measures of financial constraints actually capture constraints. We find that firms classified as constrained according to five popular measures do not in fact...

Financial frictions represent a severe obstacle to firm innovativeness. The paper explores this link in times of crisis and provides new insights on the role of relationship lending for small and micro-sized firms. Not only small and medium enterprises (SMEs) have a lower probability to innovate...

In this paper we analyse the role financial constraints play in firm expansion in both domestic and export markets. We use data on Slovenian manufacturing firms that were active between 2001 and 2012. In contrast to existing studies, we use generalized propensity score and continuous matching...

This paper analyses the impact of policy initiatives co-ordinated by Asian national governments on fi…rms access to external …finance, using a unique …firm-level database of eight Asian countries- Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand over the...