Aggregate investment and consumption have heterogeneous cyclical implications on firm-level earnings and the cyclical earnings patterns are associated with future abnormal returns. Earnings cyclicalities give rise to an information channel through which anticipated changes in investment and...

This paper investigates the possible role of asset tangibility on corporate's investment decision. As Almeida and Campello (2007) suggest, firm's asset tangibility could promote firm's borrowing ability by providing more collateral to financial intermediaries, reduce financial restriction, and...

We investigate the complex interactions between credit constraints, political instability, and capital accumulation using a novel approach based on Kiyotaki and Moore's (1997) theoretical framework. Drawing on a unique firm-level data set from Middle-East and North Africa (MENA), empirical...

We study the consumption and investment model under time-varying liquidity constraints (TVLC) that are widely used in reality. We first develop a martingale method to analyze the case in which the borrowing limit is specified by the debt-to-income ratio limit and then extend this framework to...

Cryptocurrencies have left the dark side of the finance universe and become an object of study for asset and portfolio management. Since they have a low liquidity compared to traditional assets, one needs to take into account liquidity issues when adding them to the same portfolio. We propose a...

This research provides new evidence on financing constraints on corporate fixed investment by emphasizing the role of cash holdings as a precautionary source of funds. Applying GMM estimates to a sample of 106 Jordanian firms, the results suggest that firms follow trade-off theory in financing...

This paper studies the interplay between firm investment and cash flow hedging decisions when the decision-maker has time-inconsistent preferences. We show that cash flow hedging acts as a double-edged sword. In some cases, cash flow hedging enhances firm value because the firm can thus invest...

The purpose of this paper is to investigate the possible role of asset tangibility (mainly collateral) on corporate’s investment decision. To satisfy the purpose, we highlight the differences of corporate investment behaviors between the 1990s and the 2000s considering its financial phase. The...

This article aims to contribute to the Post Keynesian theory of the firm by refining the long run financial frontier models with three key elaborations reflecting (1) banking convention, such as debt service coverage ratio and the maximum gearing ratio, (2) portfolio approach in firm’s...

This study aims to examine the financing cash flow sensitivity into the firm investment of Environment Sensitive Firms (ESFs). To improve the robustness of our analysis, we implement cluster regression to analyze the 300- firms listed on Shenzhen Stock Exchange. The findings of this study...