This paper examines the dynamic relationship between firm leverage and risktaking. We embed the traditional agency … problem of asset substitution within a multi-period model, revealing a U-shaped relationship between leverage and risktaking …, evident in data from both the U.S. and Europe. Firms with medium leverage avoid risk to preserve the option of issuing safe …

The effect of uncertainty on equilibrium wage rates causes uncertainty to have a negative impact on marginal q. In turn …, uncertainty reduces corporate investment and employment. Using a novel firm-level measure of cash flow uncertainty, we find … empirically that uncertainty has a strong negative impact on corporate employment and investment in both tangible and intangible …

In this paper, we analyze the effect of financial uncertainty on corporate investment using firm-level panel data from … the Republic of Korea. We find that financial uncertainty has a significant negative effect on corporate investment, and … negative effect of uncertainty than are mediumsized firms. The negative effect of uncertainty on large firms slightly declined …

, ultimate lenders and financial intermediaries. The model is used to investigate the impact of uncertainty about the likelihood … of governmental bailouts on leverage, interest rates, the volume of defaults and the real economy. The distinction … between risk and uncertainty is implemented by applying the multiple priors framework to beliefs about the probability of …

, ultimate lenders and financial intermediaries. The model is used to investigate the impact of uncertainty about the likelihood … of governmental bailouts on leverage, interest rates, the volume of defaults and the real economy. The distinction … between risk and uncertainty is implemented by applying the Gilboa-Schmeidler maxmin with multiple priors framework to lenders …

In this paper, we analyze the effect of financial uncertainty on corporate investment using firm-level panel data from … the Republic of Korea. We find that financial uncertainty has a significant negative effect on corporate investment, and … negative effect of uncertainty than are mediumsized firms. The negative effect of uncertainty on large firms slightly declined …

The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through … the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the …