The Lucas (1978) Tree Model lies at the heart of modern macro-finance. At its core, it provides an analysis of the equilibrium price of a long-lived asset in an exchange economy where consumption is the objective, and the sole purpose of the asset is to smooth consumption through time....

Financial hedging and corporate diversification are often considered substitutive means of risk management, implying that rapid development of financial hedging markets will yield less need for firms to manage risk through costly diversification. Building on a stakeholder-based view of risk...

This paper examines the propensity of firms to comove in investment decisions. Although stock return comovement and herding among investors received considerable attention in existing work, little is known about correlated investment behavior of firms. After controlling for the similarity of...