We use a dynamic model of cash management in which firms face competitive pressure to show that competition increases … competition has first order effects on the cash holdings and financing decisions of constrained firms, in ways consistent with our … theory …

leverage and product-market competition as predictors of financial distress hazard; and lack of attention to frailty as a … a managerial effort problem, mitigated by leverage and product-market competition as substitute disciplining devices … effect of leverage on financial distress hazard is inverted-U-shaped; (ii) the effect of the competition is U-shaped; and …