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Investment, Liquidity Constraints and Bank Relationships: Evidence from German Manufacturing Firms

Elston, Julie Ann - C.E.P.R. Discussion Papers - 1996

This paper presents evidence supporting the theory that informational and incentive problems in capital markets affect …

Persistent link: https://www.econbiz.de/10005136704

Produce or Speculate? Asset Bubbles, Occupational Choice and Efficiency

Cahuc, Pierre; Challe, Edouard - C.E.P.R. Discussion Papers - 2009

We study the macroeconomic effects of rational asset bubbles in an overlapping-generations economy where asset trading requires specialized intermediaries and where agents freely choose between working in the production or in the financial sector. Frictions in the market for deposits create...

Persistent link: https://www.econbiz.de/10008557019

Asset Prices and Business Cycles with Costly External Finance

Gomes, Joao F; Yaron, Amir; Zhang, Lu - C.E.P.R. Discussion Papers - 2003

This Paper asks whether the asset pricing fluctuations induced by the presence of costly external finance are empirically plausible. To accomplish this, we incorporate costly external finance into a dynamic stochastic general equilibrium model and explore its implications for the properties of...

Persistent link: https://www.econbiz.de/10005667119

Equilibrium Cross-Section of Returns

Gomes, Joao F; Kogan, Leonid; Zhang, Lu - C.E.P.R. Discussion Papers - 2002

We explicitly link expected stock returns to firm characteristics such as firm size and book-to-market ratio in a dynamic general equilibrium production economy. Despite the fact that stock returns in the model are characterized by an intertemporal CAPM with the market portfolio as the only...

Persistent link: https://www.econbiz.de/10005123908

Financial-Friction Macroeconomics with Highly Leveraged Financial Institutions

Luk, Sheung Kan; Vines, David - C.E.P.R. Discussion Papers - 2011

shocks. Financial institutions can only obtain their funds by paying an interest rate above the risk-free rate, and this risk …

Persistent link: https://www.econbiz.de/10009322500

Asset Pricing Implications of Firms' Financing Constraints

Gomes, Joao F; Yaron, Amir; Zhang, Lu - C.E.P.R. Discussion Papers - 2002

We incorporate costly external finance in a production based asset pricing model and investigate whether financing frictions are quantitatively important for pricing a cross-section of expected returns. We show that the common assumptions about the nature of the financing frictions are captured...

Persistent link: https://www.econbiz.de/10005497817

Aggregate Risk and the Choice between Cash and Lines of Credit

Acharya, Viral V; Almeida, Heitor; Campello, Murillo - C.E.P.R. Discussion Papers - 2012

We model corporate liquidity policy and show that aggregate risk exposure is a key determinant of how firms choose … with high aggregate risk find it costly to get credit lines and opt for cash in spite of higher opportunity costs and … liquidity premium. Likewise, in times when aggregate risk is high, firms rely more on cash than on credit lines. We verify these …

Persistent link: https://www.econbiz.de/10011083590

The Real Effects of Investor Sentiment

Polk, Christopher; Sapienza, Paola - C.E.P.R. Discussion Papers - 2003

Does inefficiency of financial markets have real consequences? Or does it only result in transfers of wealth from noise traders to arbitrageurs? We study firm business investment to address this question. In our model, benevolent managers of overvalued companies invest in projects with negative...

Persistent link: https://www.econbiz.de/10005067581

Financial Constraints in China: Firm-Level Evidence

Poncet, Sandra; Steingress, Walter; Vandenbussche, Hylke - C.E.P.R. Discussion Papers - 2009

This paper uses a unique micro-level data-set on Chinese firms to test for the existence of a 'political-pecking order' in the allocation of credit. Our findings are threefold. Firstly, private Chinese firms are credit constrained while State-owned firms and foreign-owned firms in China are not;...

Persistent link: https://www.econbiz.de/10005661590

Corporate Cash and Employment

Bacchetta, Philippe; Benhima, Kenza; Poilly, Céline - C.E.P.R. Discussion Papers - 2014

In the aftermath of the U.S. financial crisis, both a sharp drop in employment and a surge in corporate cash have been observed. In this paper, based on U.S. data, we document that the negative relationship between the corporate cash ratio and employment is systematic, both over time and across...

Persistent link: https://www.econbiz.de/10011145443