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on Corporate Finance |
| By: | Eiblmeier, Sebastian |
| Abstract: | This paper explores the link between business outlook and corporate debt. Previous research has found business outlook to be a key determinant of firm investment and firm investment to be a key reason for firms to take on debt. This implies a connection between outlook and debt. Indeed, panel regressions show a tight connection between business sentiment and firms' debt growth. A mediation analysis reveals that most of this effect runs through inventories and accounts receivable, whereas for investment only a smaller effect can be found. |
| Keywords: | Firm expectations, corporate finance, panel regression, mediation analysis. |
| JEL: | C23 D22 D84 D92 G31 |
| Date: | 2025–03–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128296 |
| By: | Gonzalo E. Basante Pereira; Ina Simonovska |
| Abstract: | We develop a framework to measure the severity of financial constraints for young firms across countries. Using ORBIS balance-sheet data for 23 economies, we show that short-term leverage rises while long-term leverage falls early in firms’ life cycles, with this pattern persisting longer where contract enforcement is weaker. We build a model of optimal financing under limited enforcement with endogenous debt maturity and blueprint capacity that matches these patterns and enables structural measurement of financial constraints. The framework decomposes the funding gap into within-firm borrowing constraints that ease with repayment history and a scale distortion identifiable through cross-country comparisons. |
| JEL: | F34 G15 G3 G33 O43 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34985 |
| By: | Geng, Heng (Griffin); Hau, Harald; Liu, Pengfei |
| Abstract: | Corporate Opportunity Waiver (COW) laws permit firms to suspend fiduciary duties related to corporate opportunities. Fich, Harford, and Tran (2023) argue that these laws reduced firm innovation and lowered corporate valuation for research-intensive firms. However, we find that over 90% of the regressions we re-examine are non-replicable using correct samples and specifications. We further show that the reported decline in Tobin's q is confounded by the effects of the dot-com bubble burst. Moreover, public firms subject to COWs reduce takeover defenses, contradicting their argument that COW laws weaken corporate governance. Overall, their conclusion that COW laws foster managerial disloyalty and harm shareholder value is not supported by the data. |
| Keywords: | COW laws, fiduciary duties, shareholder value, innovation |
| JEL: | G34 G38 O34 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:i4rdps:285 |
| By: | Melecky, Martin; Ruiz Ortega, Claudia; Bizhan, Asset; Jambal, Ganbaatar |
| Abstract: | This paper evaluates the employment and sales effects of two widely used financial support instruments for small and medium-sized enterprises, interest rate subsidies and credit guarantees, using administrative program data from Kazakhstan matched to the universe of firms. Utilizing staggered intervention rollouts and a difference-in-differences design, the analysis reveals significant differences across program designs and local labor market conditions. Interest rate subsidies, despite their large fiscal costs, fail to improve firm performance: beneficiary firms experience a 10 percent decline in employment and no significant increase in sales. Fully subsidized credit guarantees show no discernible effects on sales or employment. By contrast, a market-aligned, fee-based partial credit guarantee that ensures lender and borrower risk-sharing increases employment by 24 percent and sales by 21 percent, with particularly stronger effects among women-led and formally incorporated businesses. These employment gains are substantially larger in regions with higher pre-program unemployment, suggesting that well-designed credit guarantees are more likely to generate net job creation in labor markets with greater slack, rather than merely reallocating workers across firms. Overall, the findings underscore the pivotal role of incentive-compatible program design and local labor market condit ions in determining the effectiveness of financial policies for small and medium-sized enterprises. |
| Date: | 2026–03–23 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11344 |