We propose an alternative measure of system-wide connectedness to the popular generalized spillover index, based on generalized forecast error variance decompositions, of Diebold and Yilmaz (2012, 2104). Our measure relies on joint conditional forecasts to decompose variance, as opposed to the...

Why do some firms enter a new market by acquiring an existing company operating in this market (external entry), while more than 90% of firms do so by building on their existing resources (internal entry)? This paper shows that human capital acquisition is a key motive behind firms' decision to...

This paper explores how financing frictions shape the formation of a customer base. Since a customer base cannot be pledged as collateral, current expenses involved in attracting customers are likely to be financed internally. Hence, liquidity-constrained firms will underinvest in the expansion...

Why do some firms enter a new sector by acquiring an existing company ("buy"), while others do so using their existing resources ("build")? Using a novel dataset constructed by merging French employer payrolls with commercial M&A datasets, we show that firms are more likely to buy when their...