Caggese, Andrea - Barcelona Graduate School of Economics (Barcelona GSE) - 2001
irreversibility constraints. The financing constraint implies that firms cannot borrow unless the debt is secured by collateral; the … irreversibility constraint that they can only sell their fixed capital by selling their business. We use this model to examine the … idiosyncratic and aggregate shocks. Our model yields three main results. First, the effect of the irreversibility constraint on …