We build a model of investment and financing decisions to study the choice between bonds and bank loans in a firm's marginal financing decision and its effects on corporate investment. We show that firms with more growth options, higher bargaining power in default, operating in more competitive...

We analyze the incentives created by debt financing in political campaigns. Debt is a significant source of funding for political campaigns, with almost half of all campaigns relying on some form of debt. Moreover, indebted politicians raise more funds in subsequent elections, especially from...