I develop a continuous-time model to examine how the interaction between competition and financial constraints affects firms' research and development (R&D) strategies. The model integrates two key characteristics of R&D investment: accelerability (i.e., higher R&D intensity leads to faster...

Using administrative data on Taiwanese lottery winners, this paper examines the effects of cash windfalls on entrepreneurship. We compare the start-up decisions of households winning more than 1.5 million NT$ (50,000 US$) in the lottery in a particular year with those of households winning less...

This paper investigates the impact of Chinese firms’ ESG performance on their financial constraint and financing activities. We find a negative association between firms’ ESG performance and their financial constraint driven by the Chinese government’s commitment to tackling climate...

This study explores the relationship between inflation and income inequality in an open-economy Schumpeterian growth model with heterogeneous households, firm-level innovation, and cash-in-advance constraints on R&D investment. We find that income inequality may monotonically increase with...

We show that firms collect more than 70% of their cash flow in the second half of the fiscal year, and firms that collect more cash by year-end earn a 6% higher per annum risk premium and save more cash. We rationalize these facts in a quantitative investment-based asset pricing model. Immediate...