In this article we describe how reimbursement cost-effectiveness thresholds, per unit of health benefit, whether set explicitly or observed implicitly via historical reimbursement decisions, serve as a signal to firms about the commercial viability of their R&D projects (including candidate...

Mandatory pension contributions (MCs) are negative shocks to a firm's liquidity that can unfavorably impact its cost of capital, financing, and investment plans. We study whether firms faced with MCs use both non-cash (NEM) and cash generating earnings management (CEM) to partly offset their...

We show that Quantitative Easing (QE) stimulates investment via a corporate-bond lending channel. Fed's large-scale purchases of MBS and treasuries creates a vacuum of safe assets, prompting safer firms to invest by issuing relatively "safe" bonds. Using micro-data around QE, we find that QE...

We use a unique dataset to show how firms in Europe used credit lines during the financial crisis. We find that firms with restricted access to credit (small, private, non-investment grade, and unprofitable) draw more funds from their credit lines during the crisis than their large, public,...

This paper examines how the similarity between the executive compensation leverage ratio and the firm leverage ratio affects the quality of the firm’s investment decisions. A larger leverage gap (i.e., a bigger difference between these two ratios) leads to more investment distortions. Managers...