We survey the theory and evidence of behavioral corporate finance, which generally takes one of two approaches. The market timing and catering approach views managerial financing and investment decisions as rational managerial responses to securities mispricing. The managerial biases approach...

This study tests if managerial preferences explain how firms hedge, i.e. how they choose between linear contracts and put options, and if they finance these hedging positions with cash-on-hand or by selling upside (call options). Using hand-collected data on derivative portfolios we characterize...

This paper examines the influence of CEO and CFO age on bank risk-taking. Using data on large U.S. banks between 2006 and 2018, we document a negative association between CEO age and the bank’s insolvency risk and market-based measures of risk-taking after controlling for bank size, asset...

We survey the theory and evidence of behavioral corporate finance, which generally takes one of two approaches. The market timing and catering approach views managerial financing and investment decisions as rational managerial responses to securities mispricing. The managerial biases approach...

We test one of the main predictions of the financial flexibility paradigm that expectations about future firm-specific shocks affect the firm's leverage. We extract the expectations of small and large future shocks from the market prices of equity options. We find that expectations for future...

The paper analyzes debt and equity capital market instruments with respect to their suitability for family firms. It highlights and evaluates different aspects in the decision process of family firms regarding the use of capital market financing. The results are based on a qualitative analysis...

We present novel empirical evidence on the use of off-balance sheet financing by publicly traded, U.S. non-financial firms. We find that about 5 percent of non-financial firms reported using a special purpose financing vehicle (SPV) to finance receivables in 2006. At the origination of the...

In this paper, we examine the effects of corporate governance mechanisms on the financing policies of New Zealand firms for the period 2004-2008. Using a unique self-constructed corporate governance index and employing the Fama and French (1999) financing model of firms, we find that firms with...