In this paper, we consider the ruin probability minimization of an insurance company that buys proportional reinsurance and invests in markets where borrowing is constrained. We use a diffusion approximation model for the surplus process of this company and assume that the company invests its...

This paper attempts to assist fellow leveraged buyout researchers understand nuanced details of corporate finance and leveraged buyouts, in particular. Given Haque, Jang, and Mayer (2022) is produced by esteemed colleagues at prestigious intuitions (Board of Governors of the Federal Reserve...

We use a comprehensive Swedish credit register to document that firms throughout the size distribution have access to fairly large and reasonably priced credit lines, but borrow relatively little from them. We rationalize this using a theoretical framework in which the expected cost of financial...

How much do financial constraints delay entrepreneurship and how much do they cost households in terms of foregone welfare and implied inequality in countries with large informal sectors and poorly developed financial markets? I use a dynamic occupational choice model with credit constraints to...

We explore how financial constraints distort the entry decisions among otherwise productive entrepreneurs and limit growth of promising young firms. A model of liquidity-constrained entrepreneurs suggests that the easing of credit constraints can induce more entry of firms with greater long-run...