We use a difference-in-differences framework to estimate the causal effects of the Federal Reserve's Primary and Secondary Market Corporate Credit Facilities (CCFs) on corporate bond credit spreads. In particular, we exploit the publication of the constituents of the SMCCF Broad Market Index to...

We build a model of investment and financing decisions to study the choice between bonds and bank loans in a firm's marginal financing decision and its effects on corporate investment. We show that firms with more growth options, higher bargaining power in default, operating in more competitive...

This study analyzes whether corporate financing policies of the US industrial firms have depended on borrowing costs during the last forty years. The results show that the impact is either zero or slightly negative. Even in the latter case, the results are economically insignificant. Overall,...

How do firms manage debt maturity in the presence of investment opportunities? I document empirically that US corporations lengthen their average maturity of debt when output and investment rates are larger. To explain these findings, I construct an economic model where firms dynamically choose...

How does uncertainty affect the costs of raising finance in the bond market and via bank loans? Empirically, this paper finds that heightened uncertainty is accompanied by an increase in corporate bond yields and a decrease in bank lending rates. This finding can be explained with a model that...

How does uncertainty affect the costs of raising finance in the bond market and via bank loans? Empirically, this paper finds that heightened uncertainty is accompanied by an increase in corporate bond yields and a decrease in bank lending rates. This finding can be explained with a model that...

This paper sheds light on the functioning of internal capital markets by analysing money market transactions within the German cooperatives and savings banks finance groups. Using a unique dataset, the money market statistical reporting, this is the first paper to explicitly analyze the...

This paper examines the intertemporal effect of corporate income taxation on the investment behavior of a firm that faces imperfect capital markets. It shows that when capital markets are imperfect, the optimizing firm goes through different phases of growth. In this dynamic setting, the effect...

The yield to maturity (YTM) or internal rate of return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments. Almost all finance textbooks state the following conditioning assumptions:(i) that the coupon payments can be reinvested at a rate equal to...