The paper examines the relationship between leverage and growth in a group of emerging central and eastern European countries, who are at different levels of financial market development. We hypothesize a non-linear relationship in that moderate leverage could boost growth while very high...

Capital structure, especially in the cases of the countries that belong in the Continental Europe system of Corporate Governance has a significant impact on the way that the firm is structured, organizationally, strategically and functionally. The decision to use the capital market or debt in...

In this paper we build a theoretical model of a firm repurchasing its corporate debt. We find that firm creditors as a group sell debt to the firm only at face value. However, because of the cross-creditor externalities buying back debt is cheaper and easier when there are many creditors, e.g.,...

In this paper, we examine the relation between innovation and a firm's financial dependence using a sample of privately-held and publicly-traded U.S. firms. We find that public firms in external finance dependent industries spend more on R&D and generate a better patent portfolio than their...

Zervos documents the precise costs of debt and equity issuance, both domestically and internationally, for firms in Brazil, Chile, and Mexico. Costs include investment banking and legal fees, regulatory and exchange listing costs, rating agency fees, and expenditures for marketing and...

We propose a rationale for why firms often return to the equity market shortly after their initial public offering (IPO). We argue that hard to value firms conduct smaller IPOs, and that they return to the equity market conditional on positive valuation signal from the stock market. Thus,...

Extant research suggests that conditional conservatism reduces information asymmetry between a firm and its shareholders as well as its debtholders. However, there is little evidence on whether conditional conservatism reduces information asymmetry differentially for shareholders and...

Banks have much more leverage than non-banks. This paper uses a joint sample of banks and non-banks between 1965 and 2013 to analyze the determinants of this leverage difference. We find that one single factor - asset risk - is able to explain up to 90% of this difference. Banks' assets consist...

Considerable research focuses on the aggregate impact of debt financing. We show that equity is empirically more important for firm growth than generally understood. An extra dollar of equity issuance is associated with an extra $0.93 of real assets, whereas an extra dollar of debt issuance is...

This paper investigates the effect of external financing on earnings management in Vietnam, a bank-dominated economy. Using a sample of 494 listed non-financial firms from 2009 to 2018, we find that external financing is positively related to earnings management, implying that firms have...