Prior research shows that technology spillovers across firms increase innovation, productivity, and value. We study how firms finance their own growth stimulated by technology spillovers from their technological peer firms. We find that greater technology spillovers lead to higher leverage. This...

Effective capital decisions not only increase the operational efficiency of businesses but also is strategic to bring the enterprise's competitive advantages to the market. Using an appropriate debt ratio helps businesses to strike a balance between internal and external resources to compete...

We study to what extent firms spread out their debt maturity dates across time, which we call "granularity of corporate debt." We consider the role of debt granularity using a simple model in which a firm's inability to roll over expiring debt causes inefficiencies, such as costly asset sales or...

This model adds to the standard neoclassical model of business fluctuations by introducing a more realistic capital structure problem, where firms have to balance the tax benefits of debt with the costs of potential financial distress. Therefore, firms solve a dynamic problem with both an...

The global economy is in the midst of an unprecedented slump caused by the coronavirus pandemic. This systemic risk like no other at a time of record-breaking debt levels, especially among nonfinancial firms across the world, could exacerbate corporate vulnerabilities, deepen macro-financial...

We provide causal empirical evidence that, even among publicly traded firms that seemingly suffer less severe information asymmetries, some firms experience hold-up problems in debt financing. Based on the prediction in Rajan (1992), we examine how changes in the ratio of short-term bank loans...