We study how interactions between financing and investment decisions can shape firm boundaries in dynamic product markets. In particular, we model a new product market opportunity as a growth option and ask whether it is best exploited by a large incumbent firm (Integration) or by a separate,...

We study how a firm's optimal integration decision depends on the interaction between the product markets and capital markets in which it operates. An integrated firm operates an internal capital market, which provides allocative flexibility but does not allow the firm to commit to specific...

I show that firms may optimally place their own equity with other firms in anticipation of possible future corporate control activity. In the model, a target and potential acquirer can negotiate before synergy values are learned. I find that equity implements an optimal mechanism, benefiting...

I study how possible future corporate control activity can influence equity sales between firms. In the model, a target and potential acquirer can trade a block of the target's equity before takeover values are learned. I find that a sale can benefit both firms at the expense of other potential...