I propose a life-cycle model where a finitely lived risk averse agent finances her housing investment choosing to provide a down payment. After signing the mortgage contract, the agent may strategically default and move into the rental market. Risk neutral lenders efficiently price mortgages...

We study the effect of financial leverage, measured using the loan-to-value (LTV) ratios, on elderly homeowners' decisions to downsize. Using a 1999-2011 sample of elderly homeowners from the Panel Study of Income Dynamics (PSID), we find that a higher LTV ratio increases the propensity to...

This paper incorporates the cost of adjustment between observed and optimal leverage in explaining the variation in firm?s equity or bank-debt financing investments. Using a dynamic adjustment approach identifies the determinants to capital structure between different financial systems. In...

We extend the literature on the effects of managerial entrenchment to consider how safety-net subsidies and financial distress costs interact with managerial incentives to influence capital structure in U.S. commercial banking. Using cross-sectional data on publicly traded, highest-level U.S....