Over the next decade, governments around the world will invest massively in new projects, aiming at closing the long-identified infrastructure gap, to sustain economic and social development, and to recover from recent adverse shocks. This paper examines this topic from two perspectives: (i) how...

Just as portfolio managers are seeking positive alpha, corporate investors are seeking Tobin's q larger than 1. The present paper develops a quantitative framework in which this process can be analyzed, and prescriptions for concrete financing decisions can be obtained. Specifically, we focus on...

By using a sample of 625 Public-Private Partnership (PPP) private sector firms that covers the years from 1980 to 2015 and straddles nine countries at varying degrees of economic development and PPP markets, we find that the motivation of the firms that undertake PPP investments varies. While...

Articles in the top finance journals largely ignore the potential of outlier-induced bias in empirical research. When finance researchers do address outliers they use techniques that tend to cause additional problems. We illustrate the problems via simulations as well as replications of studies...

Agency theory - as applied to debates in corporate governance - rests on a myth of separated ownership and control. The true separation, however, is between ownership and ownership: ownership of shares by shareholders and ownership of assets by the corporation. Shareholders are not principals;...

We examine how creditor protection affects firms with different levels of owners' and managers' personal costs of bankruptcy. Theoretically, we show that firms with high personal costs of bankruptcy borrow and invest more under a more debtor-friendly management stay system, whereas firms with...

We provide novel evidence that frictions in the financing of working capital can limit firms'production capacity, leading to the amplification and propagation of liquidity problems overtime. We propose a new approach to identify this firm credit multiplier that compares how asame firm responds...

Nowadays, non-financial corporations invest heavily in financial assets, questioning the traditional boundaries of non-financial firms. We investigate how economic policy uncertainty affects firms' holding of non-currency financial assets and portfolios of such assets in China. We find that...

Using a large sample of U.S. stocks covering more than three decades, we empirically test common criticisms of and rationales for stock repurchases. Repurchases account for a tiny fraction of the trading volume in a typical stock, making their price impact too small to facilitate short term...

In this paper, we study how legal uncertainty affects economic activity. We develop a parsimonious model with different types of legal uncertainty that reduce economic activity and that can be classified as idiosyncratic (i.e., diversifiable) or systematic (i.e., nondiversifiable). We test the...