Intuition suggests that firms with higher cash holdings are safer and should have lower credit spreads. Yet empirically, the correlation between cash and spreads is robustly positive and higher for lower credit ratings. This puzzling finding can be explained by the precautionary motive for...

This study analyzes the influence of operating capital on a firm’s profitability in the manufacturing sector of China. The study investigates that operating capital develops a non-linear relationship with firm profitability by using the ordinary least square (OLS), fixed effect (FE), and...

The impact of economic distress on the financialstructure decisions of an industry has been under-investigated in the businessliterature.This research investigates the impact of the Portugueserecession of the early and mid 1990s on the financial structure decisions ofbusinesses within the...

The growth in cash holdings by non-financial corporations in emerging economies in general and Latin American in particular has received less attention compared to their peers from advanced economies. Taking into account that cash holdings contain not only cash but also short-term,...

Using a novel dataset of accounting and market information that spans most publicly traded nonfinancial firms over the last century, we show that U.S. federal government debt issuance significantly affects corporate financial policies and balance sheets through its impact on investors' portfolio...

I examine the role of sell-side debt analyst reports in the corporate bond market for financially distressed firms. Debt analysts are not subject to the same conflict-of-interest regulations as equity analysts, and for this reason it is an open question whether the primary function of debt...