Using a dynamic model of financing, investment, and macroeconomic risk, we investigate when firms sell assets to fund investments (financing asset sales) across the business cycle. Equity financed investment transfers wealth from equity to debt because asset volatility declines and earnings...

We show that business cycle dynamics and, in particular, the cyclicality of a firm's growth opportunities, determine the value of cash holdings. Cash is more valuable for firms with relatively more attractive growth opportunities in bad states of the business cycle. Cash holdings provide the...

Tatjana-Xenia Puhan demonstrates that ambidexterity need not necessarily be implemented in one single organization but can also be realised in a network of associated organizations. She develops the concept of think tanks as organizations which concentrate on radical innovations while their...

This paper examines the predictive performance of machine learning methods in estimating the illiquidity of U.S. corporate bonds. We compare the predictive performance of machine learning-based estimators (linear regressions, tree-based models, and neural networks) to that of the most commonly...

This paper analyzes the decision of firms to sell assets to fund investments (financing asset sales). We document empirical patterns of financing asset sales that cannot be explained with traditional motives for selling assets, such as financial distress or financing constraints. Using a...

This article analyzes the impact of credit risk transfer on banks' screening incentives on the primary loan market. While credit derivatives allow banks to transfer risk to investors, they negatively a ffect the incentive to screen due to the asymmetry of information between banks and investors....