We compare how bond market access affects firms' investment decisions in the United States and the euro area. Having a bond rating enables US corporations to invest more and undertake more acquisitions. In contrast, in the euro area, bond ratings have no effect on investment decisions....

This paper explores the hypothesis that the rise in intangible capital is a fundamental driver of the secular trend in US corporate cash holdings over the last decades. Using a new measure, we show that intangible capital is the most important firm-level determinant of corporate cash holdings....

Prior research shows that Dodd-Frank Act's regulations on credit rating agencies (CRAs) increase rated firms' risk of rating downgrades, regardless of their credit quality (see Dimitrov, Palia and Tang (2015)). Our difference-in-differences estimates suggest that after Dodd-Frank, low-rated...

This paper explores the connection between rising intangible capital and the secular upward trend in US corporate cash holdings. We calibrate a dynamic model with two productive assets, tangible and intangible capital, to highlight the following points: 1) since only tangible capital can be...