Using one composite and five alternative measures of asset liquidity, we examine the role of short-term debt in taming the dark side of asset liquidity: the negative effect of high asset liquidity facing unsecured bondholders. Addressing the joint determination of leverage and debt maturity, the...

This study explores the effect of CEO-employee pay ratio on bond yield spreads. We find that there exists a positive relation between CEO-employee pay ratio and bond yield spreads. Since bond yield spread has been used as a proxy for a corporation's cost of debt, our finding suggests that...

We present a theoretical model and empirical evidences that liquid real asset, which is of high liquidation value, provides an alternative internal channel for supporting corporate innovations. We employ a simple two-period model in which existing assets can be liquidated or placed as collateral...