assets to survive runs. Regulation similar to the liquidity coverage ratio and the net stable funding ratio (that are soon be …

We study the effect of real asset liquidity on a firm's cost of capital. We find an aggregate asset-liquidity discount … in firms' cost of capital that is strongly counter-cyclical. At the firm-level we find that asset liquidity affects firms … periods of high asset liquidity have lower cost of capital. This effect is stronger when the asset liquidity is provided by …

drying up of liquidity. Financial firms raise short-term debt in order to finance asset purchases. When asset fundamentals … worsen, debt induces firms to risk-shift; this limits their funding liquidity and their ability to roll over debt. Firms may … de-lever by selling assets to better-capitalized firms. Thus the market liquidity of assets depends on the severity of …

market liquidity and shorter debt maturity can exacerbate this externality and cause costly firm bankruptcy at higher … fundamental thresholds. Our model provides implications on liquidity-spillover effects, the flight-to-quality phenomenon, and …

We analyze a model of optimal capital structure and liquidity choice based on a dynamic tradeoff theory for financially … introduce a cost of external financing for the firm, which generates a precautionary demand for liquidity and an optimal … liquidity management policy for the firm. An important new cost of debt financing in this context is an endogenous debt …

liquidity may be related positively to the longer-term probability of default. Our empirical analysis confirms these predictions …

constrained firms demand and supply liquidity. Bub- bles are more likely to emerge, the scarcer the supply of outside liquidity … and the more limited the pledgeability of corporate income; they crowd investment in (out) when liquidity is abundant …

We study the interplay between corporate liquidity and asset reallocation opportunities. Our model shows that … associated with the merger. We call these transactions "liquidity mergers," since their main purpose is to reallocate liquidity … to firms that might be otherwise inefficiently terminated. We show that liquidity mergers are more likely to occur when …

make sure that all debts within the system are settled. The main result is that these liquidity needs are larger when these …