This article presents one of the most comprehensive studies to date to employ filtering techniques to distinguish between routine and "investment spike" financing. This study documents significant heterogeneity in investment spike financing, particularly by firm size. Further, when spike size or...

We analyze whether financial constraints of Brazilian firms are alleviated by ownership structure. More specifically, we study whether the presence of nonfinancial firms as shareholders of Brazilian firm mitigates financial constraints. We find that the presence of nonfinancial firms as...

We construct a model to show that predatory strategies by a financially strong rival can cause a financially weak firm to underinvest. This threat intensifies when the two firms produce similar products and share similar future investment opportunities. We show that cash holdings become more...

How do firms vary their capital investment and financing policies in response to business cycle fluctuations within their industry? To address this question, we use the regime-switching approach to compute the quarterly time-series of the probability of a future industry downturn for industry...

This book presents a new approach to the valuation of capital asset investments and investment decision-making. Starting from simple premises and working logically through three basic elements (capital, income, and cash flow), it guides readers on an interdisciplinary journey through the...

This paper builds on Rosen (1981) and Hvide (2002) to provide a simple framework that elucidates the nature of incentives in the tournaments among top executives in both the external managerial labor market for the top executive positions in other companies and within the executives' own firm...

Using firm-level data on the Japanese manufacturing industry, this paper studies the causal impact of uncertainty on the dynamic relation between corporate investment and financing conditions. It demonstrates that the cautionary effect that makes actual corporate investment decisions indifferent...

In this paper, we examine the relation between small and medium-sized (SMEs) capacity to access external capital and innovation in Vietnam. We find that SMEs with a high debt ratio tend to be more innovative. After controlling for several firm characteristics, long-term debt remains...

We analyze the real option signaling game models of debt financing of a risky project under information asymmetry, where the firm quality is only known to the firm management but not outsiders. The firm decides on the optimal investment timing of the risky project that requires upfront fixed...

We provide novel evidence that frictions in the financing of working capital can limit firms'production capacity, leading to the amplification and propagation of liquidity problems overtime. We propose a new approach to identify this firm credit multiplier that compares how asame firm responds...