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on Corporate Finance |
| By: | Vladimir Asriyan; Alberto Martin; Guillermo Ordoñez; Victoria Vanasco |
| Abstract: | We study a dynamic economy in which heterogeneous entrepreneurs invest in either generic or innovative technologies, the latter relying on intangible, firm-specific assets whose payoffs are realized through learning or experimentation (e.g., know-how, R&D). A key friction is that, to finance investment, entrepreneurs can pledge assets but not cash flows. We show that innovative technologies can relax financing constraints by increasing the value of continuation relative to default, thereby enabling borrowing against future cash flows. Technology choice is non-monotonic in productivity: low-productivity entrepreneurs innovate-to-experiment and delay investment, intermediate types adopt generic technologies, and high-productivity entrepreneurs innovate-to-scale and relax financial constraints. In equilibrium, financial frictions distort both the allocation of capital and the choice of technology, leading to insufficient experimentation. The model helps us understand how innovation is adopted across firms and economies and has novel policy implications. |
| Keywords: | borrowing capacity, experimentation, financial frictions, innovation, intangible capital, misallocation, technology choice |
| JEL: | D24 E22 G32 O31 O40 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1597 |
| By: | Karolina Hozova; Tomas Havranek; Zuzana Irsova |
| Abstract: | Appointing more women to corporate boards is widely expected to also raise firms' environmental, social, and governance (ESG) performance. We provide the first meta-analysis of this relationship, drawing on 533 estimates from 106 studies that measure ESG performance with Bloomberg or LSEG ratings. The average reported effect of a one-percentage-point increase in board gender diversity is about 0.28 ESG points, but much of it does not survive scrutiny. Correcting for publication bias with a battery of linear and non-linear methods lowers the effect to between roughly 0.08 and 0.17 points. A best-practice estimate that also imposes sound study design puts it near 0.12 for most of the world, markedly higher for the Middle East, and near -0.11 for the Southeast Asian markets that dominate the Asian evidence. The differences that remain across studies are systematic, driven mainly by geography and by the choice of estimation method rather than by the ESG-rating provider or the controls a study includes. Board gender diversity may be well worth pursuing on its own merits, but the evidence that it reliably raises ESG scores is weaker than the published record suggests. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.28549 |
| By: | Xinru Chen; Mara Faccio; Stefano Manfredonia; Jin Xu |
| Abstract: | We investigate how limiting interest deductibility under the 2017 TCJA shapes corporate innovation. Using alternative identification strategies, we show that, relative to unaffected firms, affected firms experience significant declines in patenting and narrow the technological scope of their patent portfolios. This contraction is concentrated in exploitative patents, the type of innovation most naturally supported by debt financing. By weakening firms’ ability to finance innovation with long-term debt, interest limitations reveal a novel channel linking taxation to innovation, with the debt tax shield serving as an implicit subsidy. Cross-country evidence from the staggered implementation of interest limitation rules confirms negative effects. |
| JEL: | G3 G31 H25 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35775 |
| By: | Giacomo Rodano (Bank of Italy) |
| Abstract: | Using administrative data on Italian firms and courts, this paper studies whether judicial inefficiency influences the likelihood and timing of bankruptcy filings. To address endogeneity, we instrument court efficiency with judge turnover. We find that inefficient courts significantly reduce the likelihood that financially distressed firms file for bankruptcy. Judicial inefficiency also substantially delays bankruptcy filing: firms remain insolvent longer and are more likely to enter bankruptcy after extended periods of economic distress, contributing to the persistence of insolvent and zombie firms, with adverse implications for resource reallocation. |
| Keywords: | judicial efficiency, insolvency proceedings, financial distress, zombie firms |
| JEL: | G33 K41 K22 D24 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:opques:qef_1035_26 |
| By: | Chansik Yoon (Adelaide University) |
| Abstract: | I study the aggregate implications of trade credit constraints faced by exporting firms in a small open economy general equilibrium model with heterogeneous producers. Exporters must finance fixed export costs with external credit, but borrowing capacity is limited by domestic financial development. Quantitative results show that, despite sizable firm-level distortions, trade credit constraints can have muted aggregate effects. Two general equilibrium mechanisms account for this result: tighter constraints reduce export participation but raise average exporter productivity through selection, and endogenous wage adjustment dampens the transmission of shocks to profits and export activity. The aggregate relevance of trade credit constraints increases when firm productivity is less dispersed and when labor supply is more elastic. Overall, the analysis clarifies how firm-level financial frictions interact with general equilibrium forces in shaping aggregate outcomes. |
| Keywords: | Trade credit;Business cycles;Credit constraints;Aggregate dynamics |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:adl:wpaper:2026-04 |
| By: | Gjorgjioska, Emilija; Spaseska, Tatjana; Risteska Jankuloska, Aneta; Odzaklieska, Dragica |
| Abstract: | Factoring as a product of autonomous trade practice has become a very popular method for small and medium enterprises' (SMEs) financing. The financing through factoring is a specific way of fundraising through the account receivables sale by the factor provider who buys the account receivables for some financial interest. The main aim of the research is to analyze the factoring legal regime and practical application of factoring in the Republic of North Macedonia through some economic indicators. More specifically, it will be implemented comparative analysis on the legal regime and application in some Balkan countries. The main findings of the research highlight that the factoring in the Republic of North Macedonia is recognized in many legal acts but it's still missing a unitary regulation for the way on which the financial companies and banks will perform this service as factors. Considering the results of the research, the authors provide recommendations aimed to improve the application of factoring as an alternative source for SME's finding in North Macedonia. |
| Keywords: | factoring contract, SMEs, financing, lex specialis |
| JEL: | K22 K12 C00 G32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esconf:343400 |
| By: | Irene Di Marzio (Bank of Italy); Sara Pinoli (Bank of Italy) |
| Abstract: | Mergers and acquisitions (M&As) play a key role in the restructuring of the business sector, with potential implications for economic growth, allocative efficiency, market power and the public interest. This paper uses data from the Chambers of Commerce and Moody's Orbis, documents M&A deals in Italy and other major European Union countries to describe the firms involved and examine the effects of M&As on firm performance. The main findings show that, over the past decade, approximately 6, 000 operations per year have been recorded in Italy, with the trend increasing over the last five years. M&As have primarily involved firms that are more technologically advanced, both in manufacturing and services, and have contributed to the consolidation of the production system. Within five years of the deal, employment in the consolidated firm is about 4 per cent lower than it would have been without the deal. This evidence is partly due to divestitures of business units, consistent with processes of productive reorganization. The impact of M&A transactions varies depending on the competitive environment: in less internationally exposed sectors, an increase in market power is also observed, whereas no significant effects are found in tradeable sectors. |
| Keywords: | mergers and acquisitions, firm performance, market power, competition |
| JEL: | G34 L25 L40 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:opques:qef_1045_26 |