From 2000 to 2015 there was a large increase in U.S. dollar debt issues by Chinese firms. Financial policy makers have been concerned about potentially serious negative consequences from this rapid growth in foreign currency corporate debt. We first observe that the average growth rate of these...

Corporate capital structure has been a key, challenging puzzle for finance for more than 50 years. Why do firms use the observed financing methods? The literature has developed useful ideas and a much-improved sense of the relevant facts to solve this puzzle. Taxes, the need to fund investments,...

In dynamic capital structure models with an investor break-even condition, the firm's Bellman equation may not generate a contraction mapping, so the standard existence and uniqueness conditions do not apply. First, we provide an example showing the problem in a classical trade-off model. The...

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...

Existing studies of pricing when customers queue, assume that the firm cannot adjust the price to the state of demand. In most applications this assumption is false. We adapt the classic model of Naor (1969 Econometrica) to allow the firm to adjust the price to the state of demand. In contrast...