I employ a dynamic multi-equation model in which firms make interdependent financing and investment decisions under the constraint that sources and uses of cash must be equal. In this setting, R&D-cash flow sensitivities for young and mature high-tech firms are both small and indistinguishable...

We model a dynamic duopoly in which firms can potentially drive their rivals from the market. A consequence is that, for some ranges of parameters, the static Cournot equilibrium outcome cannot be sustained in an infinitely repeated setting. In those cases, there is a Markov perfect equilibrium...

Many firms cite financial constraints as some of the most important impediments to their investment and growth. Using a unique data set from the Czech Republic this paper investigates the importance of financing constraints in the context of exporters. It finds that exporters are less...

We investigate the relation between portfolio constraints (tests) that Collateralized Loan Obligations (CLOs) have to pass monthly, CLO managers' loan trading choices and CLO equity returns. We find that stringent portfolio constraints are positively associated with the influence of CLO junior...

We study the real effects of credit market sentiment on corporate investment and financing for a comprehensive panel of U.S. public and private firms over 1963-2016. In the short term, we find that high credit market sentiment in year t correlates with high corporate investment and debt issuance...

This study investigates whether fluctuations in credit supply in a macroeconomy and a relational bank's financial condition affect the capital structure adjustment of firms. Using data for Japanese listed firms from 1988 to 2014, we find that firms adjust their capital structure slower during...

We consider portfolio optimization problems with expected loss constraints under the physical measure P and the risk neutral measure Q, respectively. Using Merton's portfolio as a benchmark portfolio, the optimal terminal wealth of the Q-risk constraint problem can be easily replicated with the...

We present a model in which banks and other financial intermediaries face both occasionally binding borrowing constraints, and costs of equity issuance. Near the steady state, these intermediaries can raise equity finance at no cost through retained earnings. However, even moderately large...

This study seeks to examine the impact of the cash level on fixed investment by Brazilian companies in the crisis of 2015 and 2016. Using quarterly data from 2011 to 2016, with a sample of 166 companies (excluded utilities, telecommunications due to the high regulation imposed by the Brazilian...

This study examines whether and how an entrant (she) can enter a market with a dominant incumbent (he), when they both are capital constrained and need to borrow loans from the credit market. While in a perfectly competitive credit market, the success of the entrant depends on her target on...