This paper provides a survey of the trade-off theory of corporate capital structure. First we provide an analysis of an equilibrium version of the theory. The firm raises debt from an investor. Debt provides interest tax shields but raises the probability of costly bankruptcy. The model provides...

Investors increasingly allocate capital outside of public equity markets and through private equity investments. We evaluate capital allocation efficiency in public and private markets by comparing the marginal product of capital in firms that receive equity in each market. Public markets...

Using a new measure of labor mobility instrumented by state-level shocks, I find that an increase in worker mobility negatively affects firms' average leverage and investment rates, but only in firms that rely on high-skill workers. I develop a dynamic model that provides an economic mechanism...