political risk – not just the level of risk – are important for how firms manage political risk. The importance attributed to … political risk by corporate executives has increased over the last 15 years and our results show that political risk is now … considered more important than commodity (input) risk. Our analysis suggests that nearly 50% of firms avoid (not simply reduce …

Investors have to be offered risk premiums to invest in risky assets. These risk premiums take different forms in … different asset markets: equity risk premiums (ERP) in stock markets, default spreads in bond markets and real asset premiums in … economy, the risk aversion of investors, information uncertainty and fear of catastrophe, among other factors. In practice …

Default probability plays a central role in the static tradeoff theory of capital structure. We directly test this … theory by regressing the probability of default on proxies for costs and benefits of debt. Contrary to predictions of the … theory, firms with higher bankruptcy costs, i.e., smaller firms and firms with lower asset tangibility, choose capital …

Probability of default plays a central role in the static tradeoff theory of capital structure. We provide a direct … test of this theory by regressing the probability of default, measured by S&P credit ratings and Moody's KMV Expected …. Contrary to predictions of the theory, firms with high bankruptcy costs, that is smaller firms and firms with lower asset …

unemployment risk. We exploit changes in state unemployment insurance laws as a source of variation in the costs borne by workers …-intensive and financially constrained firms. We estimate the ex ante, indirect costs of financial distress due to unemployment risk …

emissions, thereby exposing Australian firms to increased carbon risk, as a quasi-natural experiment to examine the causal … effect of carbon risk on firm capital structure. We find that the Kyoto Protocol ratification leads to a decrease in …. Further analysis indicates that increased carbon risk leads to higher financial distress risk, which motivates firms to …