The key insight from the seminal work by Modigliani and Miller (1958) is that market imperfections are necessary for financial decisions such as the debt vs. equity to impact firm value. When firms choose debt finance, they must also decide between public debt (e.g., corporate bonds) and private...

We use a unique dataset of product warranty offerings by firms to investigate the effect of a firm's warranty reserve levels on its capital structure decisions. Our sample consists of firms that (i) offer explicit warranties, (ii) likely offer implicit product warranties, and (iii) are in...

We show that managerial learning from stock prices can lead to feedback loop vulnerability: liquidity-induced trading can impose a negative externality on the firm's investment decisions, inducing liquidity unconstrained investors to sell their stock holdings. Interestingly, overconfident...

Firms rely on patenting and trade secrecy to protect their intellectual property. We study how changes in the trade-off between patenting and secrecy affect firms' stock liquidity and financing outcomes. We show that an international trade agreement (TRIPS) that strengthened patent protection...

Is bank financing compatible with innovation? We show that an exogenous enhancement in value of borrowers' patents, either through greater patent protection or creditor rights over collateral, results in cheaper loans. Using regression discontinuity design, we show while R\&D investment drops...