This paper attempts to test whether financial supply-side shifts explain the low-investment climate of private firms in Germany. The core contention is that a firm's financial position contributes to its access to external finance on credit markets. Special emphasizes is put on small and...

We propose a model of a firm’s reversible investment decision with macroeconomic conditions based on optimal switching of a diffusion regime. The switching costs and the cash flow generated from the firm depend on a business cycle alternating via a Markov chain, and the triggers of investment...

This paper attempts to test whether financial supply-side shifts explain the low-investment climate of private firms in Germany. The core contention is that a firm's financial position contributes to its access to external finance on credit markets. Special emphasizes is put on small and...

We propose an augmented version of the RBC model that can take into account the existence of lags in observation of demand shocks. This hypothesis seems to be a good framework to account for inventories fluctuations. We find some evidence showing the introduction of lag in observation as well as...

This paper studies the impact of business cycles on firms' strategic investment decisions by developing and solving a continuous time regime-dependent real options game in an asymmetric duopoly. The value functions, roles and optimal investment timing decisions of the two firms in the expansion...

This paper studies the impacts of the interactions between the changing macroeconomic conditions and the nature of competition on firms' investment timing decisions. With a model featuring business-cycle variations in both the profit level and the expected growth rate and volatility of the...

We examine the influence of economic downturns on the relation between diversification and firm value in a large panel of U.S. firms over the period from 1984 to 2014. When markets are incomplete or there are significant frictions, diversification provides value when the fortunes of one business...

In this paper I evaluate the contribution of financial frictions in explaining the drop in aggregate TFP through misallocation during the Great Recession. I build a quantitative model with heterogeneous establishments; with the help of the model I compute the counterfactual drop in...

I study the behavior of U.S. non-financial corporates after the financial crisis. I document an increase in the real debt holdings and correspondingly the leverage for these firms. Controlling for firm and time fixed effects, I find a higher long-term debt to asset ratio to be associated with...

The opportunity cost approach suggesting a countervailing cyclical effect between R&D and short-term investments is the subject of theoretical and empirical debate. The lack of firm-level panel data on R&D and ambiguous indicators for demand fluctuations has hindered empirical testing of...