Firms alter investing decisions when there is debt in the capital structure. Security design features can exacerbate the situation. This article studies how strategic debt service may affect investment distortions resulting from debt financing in a dynamic framework. When the production decision...

Information asymmetry and liquidity concentration has been widely discussed in literatures. This study shows how liquidity influences not only forecasting performances of term structure estimation, but also information transmission and price adjustment across markets. Our analysis helps...