Since debt is typically riskier in recessions, transfers from equity holders to debt holders associated with each investment also tend to concentrate in recessions. Such systematic risk exposure of debt overhang has important implications for the investment and financing decisions of firms and...

Entrepreneurs face significant non-diversifiable business risks. We build a dynamic incomplete markets model of entrepreneurial finance to demonstrate the important implications of nondiversifiable risks for entrepreneurs' interdependent consumption, portfolio allocation, financing, investment,...

The financial market gives significant consideration to the supply chain activities of publicly listed firms, which could in turn use their investments in the supply chain to manage market expectations. We study the effects of the capital market concerns of a publicly traded retailer that...

The 2008 financial crisis exemplifies significant uncertainties in corporate financing conditions. We develop a unified dynamic q-theoretic framework where firms have both a precautionary-savings motive and a market-timing motive for external financing and payout decisions, induced by stochastic...