firm-level capital investment, risk management, and debt issuance. The effects of uncertainty vary significantly by firm … capital investment is significantly weaker for firms that hedge their output price risk. Our analysis highlights that, in the … ability to hedge risk exposures …

We formulate a robust theory of liquidity and risk management based on two fundamental frictions: 1) the entrepreneur … significant distortions for risk-sharing, corporate investment, and consumption. With regard to concern for ambiguity aversion …, the impacts of ambiguity on risk hedging is ambiguous due to the interactions between robustness and limited commitment …