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We model a firm's demand for liquidity to develop a new test of the effect of financial constraints on corporate policies. The effect of financial constraints is captured by the firm's propensity to save cash out of cash f lows (the cash flow sensitivity of cash). We hypothesize that constrained firms should have a positive cash f low sensitivity of cash,(More)
I exploit sharply nonlinear funding rules for defined benefit pension plans in order to identify the dependence of corporate investment on internal financial resources in a large sample. Capital expenditures decline with mandatory contributions to defined benefit pension plans, even when controlling for correlations between the pension funding status itself(More)
This paper proposes a new strategy to identify the effect of Þnancial constraints on corporate investment. When Þrms are able to pledge their assets as collateral, investment and borrowing become endogenous: pledgeable assets support more borrowings that in turn allow for further investments in pledgeable assets. We show that this credit multiplier has a(More)
We use the August 2007 crisis episode to gauge the causal effect of financial contracting on real firm behavior. We identify heterogeneity in financial contracting at the onset of the crisis by exploiting ex-ante variation in long-term debt maturity structure. Using a difference-indifferences matching estimator approach, we find that firms whose long-term(More)
While previous empirical literature has examined the effect of founder-CEOs on Þrm performance , it has largely ignored the effect of Þrm performance on founder-CEO status. In this paper, we use instrumental variables methods to better understand the relationship between founder-CEOs and performance. Using the proportion of the Þrm's founders that are dead(More)
The objective of this work was to compare Doppler flows pulsatility index (PI) and resistance indexes (RI) of uterine and internal iliac arteries during pregnancy in low risk women and in those with stage-1 essential hypertension. From January 2010 and December 2012, a longitudinal and prospective study was carried out in 103 singleton uneventful(More)
Research in behavioral corporate finance takes two distinct approaches. The first emphasizes that investors are less than fully rational. It views managerial financing and investment decisions as rational responses to securities market mispricing. The second approach emphasizes that managers are less than fully rational. It studies the effect of nonstandard(More)
Financial distress is more likely to happen in bad times. The present value of distress costs therefore depends on risk premia. We estimate this value using risk-adjusted default probabilities derived from corporate bond spreads. For a BBB-rated firm, our benchmark calculations show that the risk-adjusted NPV of distress is 4.5% of pre-distress firm value.(More)