In this paper we study firm dynamics and industry equilibrium when firms under financial distress face a non-trivial choice between alternative bankruptcy procedures. Given limited commitment and asymmetric information, financial contracts specify default, renegotiation and reorganization...

We provide a model of dynamic duopoly in which firms face financial constraints and disappear when they are unable to fulfill them. We show that, in some cases, Cournot outputs are no longer supported in equilibrium, because if these outputs were set, a firm may have incentives to ruin the...

Financing research and development (R&D) through loans is usually a costly endeavor. Information asymmetry, outcome uncertainty and low collateral value tend to increase the cost of debt. Based on a large panel of heterogeneous firms, this study shows that recipients of public R&D grants, on...

This article assesses the role of credit constraints for exports at the firm level. Theoretical models by Chaney, Manova, and others suggest that credit constraints are detrimental for exports. We examine this hypothesis empirically at the firm level by using data on Chinese enterprises compiled...

We study how financing constraints affect the cash holdings of small and mediumsized enterprises. There has been little empirical work on this topic, even though these firms often face financial constraints. We contribute by using detailed data on credit ratings in Sweden as a measure of...