We consider a spatial model of bank competition to study how the diffusion of information technology affects competition in the lending market, stability of the banking sector, and social welfare. We find that the effects of an improvement in information technology depend on whether or not it...

Leasing is one of the most important sources of external finance to corporate firms. This paper develops a dynamic model to investigate the role of uncertainty and financial constraint in understanding the leasing decisions of corporate firms. The model predicts that firms with high uncertainty...

This paper proposes an investor sentiment factor that can capture the process of investors' extrapolation and explores the role of the sentiment factor in the asset pricing. Using U.S. stock market data, we empirically find that the modified three-factor model augmented with sentiment factor can...