What are the economic determinants of a firm's market value? We answer this question through the lens of a generalized neoclassical model of investment with physical capital, quasi-fixed labor, and two types of intangible capital, knowledge and brand capital as inputs. We estimate the structural...

What are the economic determinants of a firm's market value? We answer this question through the lens of a generalized neoclassical model of investment with physical capital, quasi-fixed labor, and two types of intangible capital, knowledge and brand capital as inputs. We estimate the structural...

This paper studies the financial sources of aggregate risks and their impact for the cross section of asset prices. We show that in a dynamic general equilibrium model with frictions in both equity and debt markets, shocks to the costs of external equity and debt issuances, affect households'...

The standard investment-based asset pricing model with homogeneous of degree one operating profit and adjustment cost functions predicts that a firm's stock return should be equal to physical capital investment return, state-by-state. Yet, previous work testing the model typically examines the...

Using a novel measure of industry exposure to government spending, we document predictable variation in cash flows and stock returns over political cycles. During Democratic presidencies, firms with high government exposure experience higher cash flows and stock returns, while the opposite...