Distortions in capital markets can create financial constraints that deter firms from pursuing optimal investment plans. This paper explores how much these constraints affect investment by ownership type in China, using a panel data model estimated with observations on listed firms for the...

We study the impact of financing constraints on corporate risk management. Using data on credit scores matched with unique information on firm level commercial insurance purchases, we find that financing constraints lead to higher insurance spending. We adopt a regression discontinuity design...

This study examines the heterogeneity of liquidity effect on leverage and the propensity of zero leverage. Using U.S. public firms from 1990 to 2017, we demonstrate that the stock liquidity has significantly negative effects on total debt and secured debt while insignificant effects on unsecured...

We study what type of entrepreneurs are affected by financial constraints by exploiting age-based discontinuities in the amount of funding available through a public program for unemployed workers. Our sample links administrative data on 2.1 million eligible workers to the firms they create,...

The agricultural sector in developing countries like Nigeria is characterized by low productivity, driven partly by low use of modern agricultural technologies. Poor access to credit is seen as a key barrier to adoption of these technologies. Policy discourses and literature often associate...

We consider a multi-state, general-equilibrium model with collateralized financial promises to study how allowing an asset to back multiple financial contracts (i.e., tranching) affects price bases. A basis emerges when one asset can be tranched to issue more derivative securities than can be...

How do private equity (PE) investors affect firms' borrowing constraints, debt structure, and leverage dynamics? In this paper, we examine this central question by analyzing a large and novel database of PE-backed, bank-reliant, small and middle market firms in the U.S. using administrative...