We study the differences in the allocation of cash flow between Western European private and public firms. Public firms have a significantly higher investment-cash flow sensitivity than comparable private firms. These differences in investment-cash flow sensitivities are not due to more...

We analyze how creditors' simultaneous debt and equity holdings affect firm investment policies. Firms with dual ownership are less likely to have capital expenditure restrictions in loan contracts and the relation varies in predicted ways with borrowers' monitoring needs and dual owners'...

We analyze how relationship finance, such as venture capital and relationship lending, affects growth firms' capital structure choices. We show that relationship investors that obtain a strong bargaining position due to their privileged information about the firm, optimally cash in on their...

This paper presents evidence that firms choose conservative financial policies partly to mitigate workers' exposure to unemployment risk. We exploit changes in state unemployment insurance laws as a source of variation in the costs borne by workers during layoff spells. We find that higher...

Assuming an alternative corporate governance paradigm that puts employees in the firm's governance structures, as well as understanding their objective functions, we investigate capital structure decisions in an employee-governed firm. Examining corporate capital structure decisions in 12...

We empirically examine theories of secured debt. Credit risk and asset volatility increase with secured debt issuance, and the strength of this association is unrelated to contemporaneous investment. Hand-collected data reveals most secured debt is secured on all assets of the firm and rarely...

I develop a hypothesis that predicts nonlinear patterns of leverage and cash holdings over firms' financial flexibility demand stages. The hypothesis also predicts distinctive financing patterns over the financial flexibility demand stages. The empirical results support the hypothesis:...

A conceptual framework for intra-firm financing leverage analysis based on the mechanical analysis of physical leverage (the genesis of the concept of financing leverage) of a corporate firm under condition of future business risk considering a short-term planning horizon, composed of (a) an...