We examine the impact of auditor choice on debt pricing in firms' early public years when they are lesser known. Our evidence suggests that retaining a Big Six auditor, which can reduce debt monitoring costs by enhancing the credibility of financial statements, enables young firms to lower their...

This paper shows that, with pre-set price and capital decisions of firms facing uncertainty and credit rationing, price, mark up and the expected degree of capacity utilization (resp. capital) increases (resp. decreases) with the firm internal net worth

I examine how verification of financial statements influences debt pricing. I use a large proprietary database of privately-held U.S. firms, an important business sector in which the information environment is opaque and financial statement audits are not mandated. I find that audited firms have...

I discuss Minnis (2011) in the context of the broader literature on private firm financing. In particular, I focus on the unique features of the private firm setting and how it affects research design and inference. I detail the alternative information sources available to debt financiers of...

I discuss Minnis [2010] in the context of the broader literature on private firm financing. In particular, I focus on the unique features of the private firm setting and how it affects research design and inference. I detail the alternative information sources available to debt financiers of...

Using a dataset of both public and private firm connections, I find a 1.5-percentage-point increase in long-term book leverage of a firm leads to a 10-percentage-point increase in the probability it adds an additional supplier. At the same time, I do not find significant increases in sales or...

We examine the association between customer concentration and capital structure adjustment speed using a sample of listed firms in the U.S from 1977 to 2020. We find that the customer-concentrated firms have a lower speed of leverage adjustment. The decomposition of customer types identifies...

We estimate the economic costs of financial distress due to lost sales, by exploiting cross-supplier variation in real estate assets and leverage and the timing of real estate shocks. We show that for the same client buying from different suppliers, its purchases from distressed suppliers...

This paper studies the relationship between firm leverage and supplier market structure by examining their joint impacts on bargaining and relation-specific investments. We find that firm leverage decreases with the degree of competition among suppliers. Specifically, leverage decreases with the...

I explain the standard carried interest contract as a mechanism to induce incentive compatible fund leverage while also satisfying LP return objectives. Fee, leverage and target return data from private equity real estate (PERE) funds are used to calibrate the model. Steps in the modeling...