the roles played by volatility, illiquidity and debt maturity in driving debt runs, as well as on firms' capital adequacy …

I propose a theory of debt maturity as an incentive device to motivate innovation when contracts are fundamentally … when contracts are incomplete. I show how an appropriate choice of debt maturity, together with ex-post contract … partially insures the entrepreneur against failure and thus motivates innovation. The theory has novel empirical implications …

-cycle theory of debt maturity …I develop a dynamic model of financing decisions and optimal debt maturity choice in which creditors face adverse …-leverage firms eventually decide to issue debt. Because shorter maturity debt is less sensitive to information, younger firms issue …