The insights of Modigliani and Miller (Am Econ Rev 53:433–443, 1963) and Miles and Ezzell (15:719–730, https://doi.org/10.2307/2330405 , 1980) on the cost of capital of firms rank among the most important results in financial theory. The underlying assumptions regarding the financial policy,...

In this paper we provide new evidence that corporate financing decisions are associated with managerial incentives to report high equity earnings. Managers rely most heavily on debt to finance their asset growth when their future earnings prospects are poor, when they are under pressure due to...

This paper critically surveys the key literature on corporate financing policy, capital structure and firm ownership in order to identify the leading theoretical and empirical issues in this area. The theoretical component of the survey attempts to reconcile competing theories of capital...

We offer evidence of a new stylized feature of corporate financing decisions: the tendency of managers to rely more on debt financing when earnings prospects are poor. We term this 'leaning against the wind' and consider three possible explanations: market timing, precautionary financing, and...

This paper investigates whether regulatory capital requirements play an important role in determining banks’ equity capital. We estimate equity capital regressions using panel data of a sample of 560 banks for 2004–2010. Our results suggest that regulatory capital requirements are not first...

In this paper we provide new evidence that corporate financing decisions are associated with managerial incentives to report high equity earnings. Managers rely most heavily on debt to finance their asset growth when their future earnings prospects are poor, when they are under pressure due to...

This paper critically surveys the key literature on corporate financing policy, capital structure and firm ownership in order to identify the leading theoretical and empirical issues in this area. The theoretical component of the survey attempts to reconcile competing theories of capital...

We investigate the effect of mergers on corporate debt financing using time series analysis. We find that corporate debt use increases during periods of very high merger activity but is not significantly affected by variations within the normal range of merger activity. Traditional trade-off and...

In this paper we provide new evidence that corporate financing decisions are associated with managerial incentives to report high equity earnings. Managers rely most heavily on debt to finance their asset growth when their future earnings prospects are poor, when they are under pressure due to...

We analyze the effect of investor level taxes, firm-specific ownership structure and firm-specific payout policy on firms' capital structure choice. Our analysis is based on data for 10,983 firms from 13 Central and Eastern European (CEE) countries over the time period 2002-2012. Our results...