Leasing is one of the most important sources of external finance to corporate firms. This paper develops a dynamic model to investigate the role of uncertainty and financial constraint in understanding the leasing decisions of corporate firms. The model predicts that firms with high uncertainty...

Uncertainty faced by individual firms appears to be heterogeneous. In this paper, I construct new empirical measures of firm-level uncertainty using data from the I/B/E/S and Compustat. These new measures reveal persistent differences in the degree of uncertainty facing individual firms not...

We present a calibrated general equilibrium model in which collateral constraints substantially amplify and propagate aggregate shocks through their impact on asset prices and capital allocation. Compared to previous studies, this result is more robust and comes with more realistic interest rate...

There is cross-country and time-series evidence that volatility is associated with slower growth. However, matching this evidence has proven to be a challenge for growth models without market failures, as they tend to predict the opposite for values of risk aversion greater than unity. This note...

This paper investigates the link between the optimal level of non-financial firms? liquid assets and uncertainty. We develop a partial equilibrium model of precautionary demand for liquid assets showing that firms alter their liquidity ratio in response to changes in either macroeconomic or...

Recent theoretical developments relating to investment under uncertainty have highlighted the importance of irreversibility for the timing of investment expenditures and their expected returns. This has subsequently stimulated a growing empirical literature which examines uncertainty and...

We estimate the effect of demand and price uncertainty on firms' investment decisions from a panel of manufacturing firms. Uncertainty measures are derived from firms' subjective qualitative expectations. They are close to their theoretical counterparts, the variances of future demand and price...

Disclosure of information triggers immediate price movements, but it mitigates price movements at a later date, when the information would otherwise have become public. Consequently, disclosure shifts risk from later cohorts of investors to earlier cohorts. Hence, disclosure policy can be...

The main issue is the organisation of firms when different degrees of labour participation are taken into account. We start reviewing the literature on the LM firm. We then consider a less radical labour participation, i.e. the Aoki firm. We survey extensions of the Aoki's firm to the case of...

The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the probability of reaching the level has been identified,...