Modigliani and Miller theory forms the theoretical foundation of corporate finance. Yet Modigliani and Miller theory was derived from a very special case of cash flows. Weighted Average Cost of Capital (WACC), which is part of the Modigliani and Miller theory, plays a fundamental role in capital...

"In this book the authors have designed comprehensive empirical studies and identified the impacts of access to finance on the Small and Micro Enterprises (SMEs) performance. The authors applied a mix of different methodologies ranging from developing a conceptual framework to an empirical study...

In this paper we analyse income formation patterns throughout the German industrialisation process (1860-1913) through the analysis of different financial flows. Similar to Neuburger & Stokes (1974), we make use of flow statistics originally estimated by Eistert (1970) with regard to four...

In this paper, we examine the determinants of leverage in the context of China using a sample of 1844 Chinese non-financial firms over the period 2003 to 2010. This study shows that the average leverage ratio of Chinese listed firms is similar to those observed in other developing countries. The...

This study examines the impact of corporate governance on capital structure decisions based on a large panel of Chinese listed firms. Using the system Generalized Method of Moments (GMM) estimator to control for unobserved heterogeneity, endogeneity and persistency in capital structure...

We investigate the dynamics of observed and target leverage ratios and deviations from the targets. The cross-sectional persistence in observed leverage ratios is driven by highly persistent targets, whereas the time series variation is driven by transitory deviations from targets. Deviations...

We show how product market competition affects capital structure by developing a tractable model that embeds the tradeoff between the tax benefits and bankruptcy costs of debt in an industry equilibrium setting with heterogeneous, imperfectly competitive firms. Different determinants of...

Theory predicts that there is a close link between bank credit supply and the evolution of the business cycle. Yet fluctuations in bank-loan supply have been hard to quantify in the time-series. While loan issuance falls in recessions, it is not clear if this is due to demand or supply. We...

Why are downturns following episodes of high valuations of firms so severe and long? Why do firms take on high debt when they anticipate high valuations, and underperform subsequently? In this paper, we propose a theory of financing cycles where the control rights to enforce claims in an asset...

Bank insolvency and failure -- Basic concepts in finance -- Behavioral finance -- Business finance -- Capital markets -- Cash & marketable securities -- Cash flow -- Common stock -- Corporate finance -- Corporate financial management -- Corporate financial strategy -- Debt valuation --...

The thesis is articulated around three theoretical corporate finance research articles. All articles model intertwined and important corporate decisions and have in common the modeling of cash policy: Each article presents a new cash model. The articles are: "Managerial compensation, outside...

Why do firms choose high debt when they anticipate high valuations, and underperform subsequently? We propose a theory of financing cycles where the importance of creditors' control rights over cash flows (“pledgeability”) varies with industry liquidity. The market allows firms take on more...

This paper is a response to Deirdre Nansen Mccloskey's comment On 'Putting Integrity into Finance: A Purely Positive Approach' (by Werner Erhard and Michael C. Jensen) which can be found at 'http://ssrn.com/abstract=2963231' http://ssrn.com/abstract=2963231

This paper is a comment on 'Putting Integrity Into Finance: A Purely Positive Approach' (by Werner Erhard and Michael C. Jensen) which can be found at 'http://ssrn.com/abstract=2963231' http://ssrn.com/abstract=2963231

This paper is a comment on 'Putting Integrity Into Finance: A Purely Positive Approach' (by Werner Erhard and Michael C. Jensen) which can be found at 'http://ssrn.com/abstract=2963231' http://ssrn.com/abstract=2963231

The seemingly never-ending scandals in the world of finance, accompanied by their damaging effects on value and human welfare, make a strong case for an addition to the current paradigm of financial economics. We summarize here our new theory of integrity that reveals integrity as a purely...

Do financial markets properly reflect leverage? Unlike Gomes and Schmid (2010) who examine this question with a structural approach (using long-term monthly stock characteristics), my paper examines it with a quasi-experimental approach (using short-term a discrete event). After a firm has...

We live in a world where money is the medium underpinning the circulation of goods and services. Without money it is impossible if not to survive at least to have access to basic products, including cultural or educational ones. From this perspective, Gaël Giraud proposes to analyse finance...

By using short-term direct finance firms of the highest credit quality expose themselves to rollover risk in the public debt markets. Firms insure themselves against this risk by securing backup lines of credit from banks that they may use should market liquidity dry up. In a first step, this...

Do financial markets properly reflect leverage? Unlike Gomes and Schmid (2010) who examine this question with a structural approach (using long-term monthly stock characteristics), my paper examines it with a quasi-experimental approach (using short-term a discrete event). After a firm has...

We investigate the dynamics of observed and target leverage ratios and deviations from the targets. The cross-sectional persistence in leverage ratios is driven by persistent targets, whereas the time series variation is driven by transitory deviations from targets. Consistent with dynamic...

I document that publicly-listed firms which are intensive in innovation (intangible capital formation) are less able to engage in volatile external financing flows. The effect is primarily due to debt financing; equity financing acts as a partial substitute. Then, I develop a business cycle...

We analyze a model of optimal capital structure and liquidity choice based on a dynamic tradeoff theory for financially constrained firms. In addition to the classical tradeoff between the expected tax advantages of debt and bankruptcy costs, we introduce a cost of external financing for the...

The seemingly never ending scandals in the world of finance with their damaging effects on value and human welfare (that continue unabated in spite of all the various efforts to curtail the behavior that results in those scandals) argues strongly for an addition to the current paradigm of...

We analyze a model of optimal capital structure and liquidity choice based on a dynamic tradeoff theory for financially constrained firms. In addition to the classical tradeoff between the expected tax advantages of debt and bankruptcy costs, we introduce a cost of external financing for the...

The seemingly never ending scandals in the world of finance with their damaging effects on value and human welfare (that continue unabated in spite of all the various efforts to curtail the behavior that results in those scandals) argues strongly for an addition to the current paradigm of...

We analyze a dynamic model of optimal capital structure and liquidity management when firms face external financing frictions. Besides the classical tradeoff between the tax advantages of debt and bankruptcy costs, an important new cost of debt financing in this context is an endogenous debt...

Lecture 1: Ten money makers -- Lecture 2: Ten financial positions -- Lecture 3: Famous strategies -- Lecture 4: The sustainable growth rate -- Lecture 5: What does a school of management teach? -- Lecture 6: Economic income versus economic value added -- Lecture 7: Distribution policy -- Lecture...