We model the joint effects of debt maturity and cash holdings on default risk. When firms have short-term debt outstanding, negative cash flow shocks lead to a drop in liquid reserves and may cause firms to suffer losses when rolling over their debt, due to weaker fundamentals. This mechanism...

This study investigates the puzzle of zero-debt on in developing markets using a sample of firms from Eastern Europe during 2000-2013. The results of this paper are in line with the previous research of firms from developed markets. Firms that are financially constrained do not use debt as a...

This study examines the actual funding behavior of German innovative firms in the pre- and post-crisis period. Specifically, we investigate if and how the funding patterns and financial constraints of German small and medium enterprises (SME) changed during and since the financial crisis. The...

Over 40% of firms that make payouts also raise capital during the same year, resulting in 31% of aggregate share repurchases and dividends being externally financed, primarily with debt. Most externally financed payouts are the result of firms persistently setting payouts above free cash flow....

The study investigates the role of financial development in boosting the investment efficiency of firms' investments in China. Using a large sample of firm-level financial data and country level economic data over the period 2004-2015, present study creates a link between financial and real...

Financial institutions constitute an increasingly important cornerstone of capital markets, yet research at the intersection of asset management contracts and asset pricing remains sparse. In this paper, I study how externalities of managerial contracts affect asset prices in the context of...