We exploit the natural institutional variation in Western Europe to examine leverage (and debt maturity) for listed and non-listed companies (NLCs). We find that the legal efficiency measure (Djankov, et al, 2008) is more closely related to the amount of leverage and debt maturity than is the...

We investigate the effects of misvaluation (defined as fluctuation in the market value of equity relative to its intrinsic value) on financing decisions of REITs (Real Estate Investment Trusts). Our findings reveal that misvaluation increases the likelihood of capital-increasing decisions (i.e.,...

Theoretical guidance suggests a trade-off between profitability and liquidity in effect of capital structure decisions. This study investigates the link between capital structure and profitability-liquidity trade-off using descriptive and Panel-VAR analysis for 18 listed manufacturing companies...

This paper reviews the literature on a firm's capital structure that is driven by asymmetric information. One of the most popular models of firm's financing decisions under an asymmetry in the literature is the pecking order theory (POT) of Myers (1984). It is based on the argument that firms...

This study examines the effects of the firm's ownership concentration and its institutional environment on corporate debt maturity choices. As ownership concentration and debt maturity are alternative governance mechanisms, we theorize and investigate whether their association is influenced by...

The maturity of a firm's liabilities affects the information financiers produce about the firm's assets. In my model, long-term financing creates an excessive tendency for financiers to acquire information and screen out lower quality borrowers. In contrast, short-term financing deters...

We find that US public firms spread out their debt more across different sources in recession quarters, making measures of debt concentration move pro-cyclically, on average. There is substantial cross-sectional variation in these dynamics. In particular, firms with already low leverage and high...

We examine how corporate diversification affects financial leverage. Our results suggest economically large financing advantages of diversified firms, which allow them to borrow more than comparable focused firms. We identify causal effects in a novel shock-based difference-in-differences design...

Yes, they can! Machine learning models that exploit big data identify leverage determinants and predict leverage better than classical methods. By allowing for nonlinearities and complex interactions, machine learning boosts the out-of-sample R-squared from 36% to 56% over linear methods such as...

This paper offers a critical survey of the swings in banking regulation, notably with reference to leverage and risk weighted ratios. At the outset the distinction is made between economic and regulatory capital and between private vs social costs/benefits of equity finance for banking firms....