Showing 1 - 10 of 2,105
Persistent link: https://www.econbiz.de/10012829970
We develop a dynamic model of investment, capital structure, leasing, and risk management based on firms' need to collateralize promises to pay with tangible assets. Both financing and risk management involve promises to pay subject to collateral constraints. Leasing is strongly collateralized...
Persistent link: https://www.econbiz.de/10010678713
The global economy is in the midst of an unprecedented slump caused by the coronavirus pandemic. This systemic risk like no other at a time of record-breaking debt levels, especially among nonfinancial firms across the world, could exacerbate corporate vulnerabilities, deepen macro-financial...
Persistent link: https://www.econbiz.de/10013250075
This paper shows documents the fact that high growth firms maintain low debt levels. It then shows a dynamic model of financing and investment with costs of equity issuance rationalizes these findings. In the model firms keep debt at a level that lets them finance their investment purely from...
Persistent link: https://www.econbiz.de/10013117537
Using a novel dataset of accounting and market information that spans most publicly traded nonfinancial firms over the last century, we show that U.S. federal government debt issuance significantly affects corporate financial policies and balance sheets through its impact on investors' portfolio...
Persistent link: https://www.econbiz.de/10013055316
This paper investigates the link between corporate debt and investment for a group of five peripheral euro area countries. Using firm-level data from 2005-2014, we postulate a non-linear corporate leverage-investment relationship and derive thresholds beyond which leverage has a negative and...
Persistent link: https://www.econbiz.de/10011719911
Empirical evidence suggests that capital structure varies across firms facing different levels of information asymmetry, however, this evidence contradict the prediction of pecking order hypothesis. Although debt capacity constraints offer some explanation for this discrepancy, it fails to...
Persistent link: https://www.econbiz.de/10011771645
Firm-level investment paths are commonly characterised by periods of low or zero investment punctuated by large investment ‘spikes’. We document that such spikes are important for understanding firm and aggregate level investment in the UK. We show that annual variation in aggregate...
Persistent link: https://www.econbiz.de/10011817429
We use firm-level financial data to illustrate the impact of the COVID-19 crisis under several scenarios. We estimate COVID-19 induced cumulative net revenue losses for EU companies in the range of 5.4 to 10.0% of total assets, depending on the strength of the policy support and length of the...
Persistent link: https://www.econbiz.de/10012312927
This paper studies how the durability of assets affects financing. We show that more durable assets require larger down payments making them harder to finance, because durability affects the price of assets and hence the overall financing need more than their collateral value. Durability affects...
Persistent link: https://www.econbiz.de/10012937070