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on Corporate Finance |
| By: | Sara Holttinen (Department of Economics, University of Oxford); Marko Melolinna (Financial Conduct Authority); Maren Froemel (Bank of England) |
| Abstract: | Is it more challenging to obtain external debt financing for firms with more intangible assets? We analyse how intangible capital matters for firm-level financial frictions in the debt market and propose a novel strategy to identify them. Our empirical strategy builds on a theoretical framework and combines a standard collateral constraint with a no-arbitrage condition on firm debt. Specifically, the model predicts that the sensitivity of the firm interest rate spread to the firm capital-to-debt ratio should be decreasing in firm intangible intensity if intangibles are less effective in mitigating financial frictions. Intuitively, increasing the capital-to-debt ratio has a smaller effect on the interest rate spread for firms with more intangible assets, if the liquidation recovery value of intangible assets lower relative to that of tangible assets. Using a large panel of UK firms, we estimate the structural parameters of firms’ collateral constraint conditional on their capital composition. We find that interest rate spreads are indeed less sensitive to changes in the capital-to-debt ratio for firms with higher intangible intensity. Furthermore, a higher tangible stock lowers the firm interest rate spread, whilst a higher intangible capital stock is associated with a higher spread. Our findings are robust to controls for debt maturity and other firm characteristics commonly associated with financing frictions. |
| Keywords: | Intangible capital;financial frictions;borrowing constraint |
| JEL: | C58 D22 G32 |
| Date: | 2025–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:boe:boeewp:023254 |
| By: | Brancati, Emanuele (Sapienza University of Rome); Nucci, Francesco (Sapienza University of Rome); Pietrovito, Filomena (University of Molise); Pozzolo, Alberto (Roma Tre University) |
| Abstract: | This paper explores the interplay between firms' credit constraints, innovation, and export decisions. Using survey data for Italian manufacturing firms, we document strong complementarity between the two activities: innovation raises export participation, while exporting stimulates R&D. Credit rationing significantly reduces both the probability and intensity of exporting and innovation, but its effects are heterogeneous. The negative impact of credit rationing on export participation is substantially attenuated by innovation, whereas exporting provides only limited protection against the effects of financing constraints on innovation. We interpret these findings through a stylized theoretical framework in which exporting and innovation are mutually reinforcing but operate through distinct channels: innovation directly enhances export profitability through cost reductions, whereas exporting stimulates innovation only indirectly by expanding market opportunities. Overall, our findings suggest that policies fostering innovation may generate a double dividend by promoting technological upgrading while simultaneously strengthening firms' ability to sustain export activity under financial constraints. |
| Keywords: | innovation, exporting, financial constraints |
| JEL: | F14 G21 O31 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18902 |
| By: | Poorya Kabir; Adrien Matray; Karsten Müller; Chenzi Xu |
| Abstract: | Trade financing through export credit agencies is a key tool of modern industrial policy. We provide a theory to evaluate its welfare effects, and we study its causal impact on trade, firm investment, and capital misallocation by using the effective shutdown of the US export credit agency from 2015 to 2019 as a natural experiment. First, we show that the US Export-Import Bank (EXIM) has large causal effects: comparing industries exposed and unexposed to the shutdown, we find that exposed industries experience a product-level export reduction of approximately $4.49 for each $1 lost in EXIM financing. EXIM-dependent firms also experience substantial contractions in revenues, investment, and employment. Second, shutting down EXIM increases capital misallocation because firms with high marginal revenue product of capital (MRPK) disproportionately contract while low-MRPK firms are largely unaffected. Terms-of-trade adjustments and freeing capital for domestic producers do not appear to offset these losses empirically. Our results indicate that even in advanced economies with developed financial markets, industrial policy that lowers financing constraints for exporters can raise output, improve capital allocation, and generate welfare gains. |
| Keywords: | export credit agencies; industrial policy; trade finance; capital misallocation; financing constraints; exports; firm investment |
| JEL: | L52 F13 F14 H81 D24 G28 E22 G32 |
| Date: | 2026–08–24 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedawp:103700 |
| By: | Gideon Bornstein; Laura Castillo-Martinez |
| Abstract: | Governments often intervene to prevent firm closures during crises, fearing that financially constrained but viable firms may fail. We develop a firm dynamics model with incomplete financial markets and show how financial frictions generate excessive firm exit. A key statistic governing this dynamic inefficiency is the marginal propensity to exit with debt. Using confidential U.S. Census data, we estimate the relationship between debt and exit and use it to discipline the model. The calibrated model implies that eliminating financial frictions reduces firm exit from 9.3% to 5.0% and generates welfare gains of 3.6% in consumption-equivalent terms. We show that the welfare costs of financial frictions rise sharply during financial crises but change little during standard productivity recessions. Finally, we compare government-guaranteed loans and grants, quantifying the trade-off between fiscal cost and effectiveness in preventing excessive exit. |
| JEL: | E32 E44 G33 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35479 |
| By: | Reza Habibi |
| Abstract: | Systemic risk has essential impact on of a firm. In the current paper, under scenario of systemic crisis, the behavior of credit risk measure is studied and its relation to market and climate betas are proposed. Then, optimum leverage ratio and prudential coefficient are derived. Finally, using the Mote Carlo simulation method, stress tests of risk measure under systemic risk crisis event is studied. It is seen that changes throughout changing capital structure, leverage ratio, systemic risk index, market and climate betas. |
| Keywords: | Climate crisis scenario, Credit risk, Monte Carlo, Stress test, Systemic risk. |
| JEL: | C63 G21 G28 G32 G33 |
| Date: | 2026–01–07 |
| URL: | https://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2026_07 |
| By: | Bauer, Michael (Federal Reserve Bank of San Francisco and CEPR); Czarnota, Alexander (Monetary Policy Department, Central Bank of Sweden); Klein, Mathias (Research Department, Central Bank of Sweden) |
| Abstract: | Firm heterogeneity in financial constraints is a quantitatively important driver of how monetary policy transmits to inflation. Using detailed microdata on Swedish public and private firms, and high-frequency monetary policy surprises around Riksbank announcements, we document that smaller, financially constrained firms adjust prices significantly less than larger firms in response to changes in monetary policy. This heterogeneous price response materially dampens the aggregate PPI inflation response to monetary policy. Models of customer markets and financial frictions can explain our findings: because the external finance premium rises after a monetary contraction, constrained firms cut prices less to preserve cash flows, sacrificing future market share. Additional evidence on heterogeneous sales, debt, marginal cost, and markup responses further supports this channel. We consider several alternative explanations, including differences in price adjustments, working capital, market share, and export share, but these cannot rationalize our main heterogeneity result. |
| Keywords: | inflation; monetary transmission; firm heterogeneity; financial frictions |
| JEL: | E31 E32 E52 G32 L11 |
| Date: | 2026–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:rbnkwp:0468 |
| By: | Vincent Abraham; Florian Ederer; Catarina Marvao |
| Abstract: | We provide the first empirical evidence that common ownership can facilitate explicit collusion. Our unique setting, the population of legal cartels in Sweden, lets us observe cartel formation, duration, and dissolution without the sample-selection bias that plagues studies of detected cartels. Combining hand-collected ownership data with the universe of registered cartels, we compute firm-pair profit weights (κ) that measure how much one firm internalizes a rival's profits. Higher profit weights are associated with a greater likelihood of cartel participation, predict future cartel involvement, and are linked to longer cartel duration. Firms also reduce their profit weights immediately after a cartel dissolves. However, this relationship is concentrated among pairs in which the firm that internalizes the rival firm's profits colludes while the rival does not. Common ownership therefore complements a firm’s own participation in explicit collusion but substitutes for cartel participation by the rival whose profits it internalizes. |
| JEL: | D43 G32 L21 L41 L43 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35565 |
| By: | Karolina Hozova (Institute of Economic Studies, Charles University, Prague); Tomas Havranek (Institute of Economic Studies, Charles University, Prague & Centre for Economic Policy Research (CEPR), London & Meta-Research Innovation Center at Stanford (METRICS)); Zuzana Irsova (Institute of Economic Studies, Charles University, Prague & Meta-Research Innovation Center at Stanford (METRICS)) |
| 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. |
| Keywords: | board gender diversity, ESG ratings, meta-analysis, publication bias, Bayesian model averaging |
| JEL: | G34 M14 J16 C83 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2026_25 |
| By: | Tiessé Traoré (USSGB - Université des sciences sociales et de gestion de Bamako); Mohamed Traoré (USSGB - Université des sciences sociales et de gestion de Bamako); Salifou Konimba (USSGB - Université des sciences sociales et de gestion de Bamako); Ibrahim Sanogo (USSGB - Université des sciences sociales et de gestion de Bamako) |
| Abstract: | Small and medium-sized enterprises (SMEs) play a central role in Mali's economic fabric by contributing significantly to wealth and job creation. According to the African Development Bank (AfDB), Malian SMEs account for 55% of the country's gross domestic product (AfDB, 2021). However, despite this strategic role, their access to bank financing remains limited. Various studies have highlighted several factors in the literature; however, certain aspects related to country specific characteristics appear to have been overlooked. The objective of this article is to identify the main factors related to SME financing and Mali's specific context. Methodologically, this research adopts an exploratory approach based primarily on the use of secondary data, supplemented by an analysis of the Malian financial system and its financing mechanisms. The results show that the main factors relate to the Malian financial system and aspects specific to SMEs. The study highlights that, generally speaking, microenterprises have greater access to bank financing than SMEs in the WAEMU region and in Mali in particular. The study could serve as a basis for examining the factors underlying this paradox. Finally, it suggests alternative approaches notably those based on the quality of the financial system, financial literacy, and managerial competence to examine the specific challenges SMEs face in accessing financing in Mali. |
| Abstract: | Les petites et moyennes entreprises (PME) occupent une place centrale dans le tissu économique malien en contribuant significativement à la création de richesse et d'emplois. Selon la BAD, les PME maliennes contribuent dans l'économie à hauteur de 55 % au produit intérieur brut (BAD, 2021). Toutefois, malgré ce rôle stratégique, leur accès au financement bancaire demeure limité. Diverses études ont soulignés plusieurs facteurs dans la littérature, cependant certains aspects relatifs à la particularité des pays semblent négligés. L'objectif de cet article est d'identifier les principaux facteurs relatifs au financement des PME et la particularité malienne. Sur le plan méthodologique, cette recherche adopte une approche exploratoire fondée principalement sur l'exploitation de données secondaires, complétée par une analyse du système financier malien et de ses mécanismes de financement. Les résultats montrent que les principaux facteurs sont relatifs au système financier malien et des aspects spécifiques aux PME. L'étude souligne que d'une manière générale les microentreprises ont plus accès au financement bancaire que les PME dans l'espace UEMAO et au Mali en particulier1. L'étude pourrait être un élément d'appui pour étudier les facteurs explicatifs de ce paradoxe. En fin, elle propose d'autres approches notamment celle basée sur la qualité du système financier, la culture financière et la compétence managériale pour étudier la particularité des difficultés d'accès au financement des PME au Mali. |
| Keywords: | Mali. JEL Classification : G21, PME financement bancaire rationnement du crédit asymétrie d'information Mali. JEL Classification : G21 O16 L26 O55 Type du papier : SME bank financing credit rationing information asymmetry Mali. Classification JEL: G21 O16 L26 O55, PME, financement bancaire, rationnement du crédit, asymétrie d'information, O55 Type du papier : SME, O16, L26, O55, Mali. Classification JEL: G21, information asymmetry, credit rationing, bank financing |
| Date: | 2026–06–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05686373 |
| By: | Tania Babina; Alex X. He; Renhao Jiang |
| Abstract: | Using a new firm-level measure of AI investment based on AI-skilled employment—spanning machine learning through generative and agentic AI—we show that AI investments are associated with productivity growth in recent years, but not over the previous decade. We trace the productivity gains to the accumulation of organization capital that AI helps create: durable firm-specific knowledge acquired through learning-by-doing that enables more efficient production. We build a novel measure of organization capital based on workers’ job descriptions and document that productivity gains are driven by AI-skilled jobs that build organization capital. Overall, our findings suggest that AI investment generates productivity growth by creating organization capital. |
| JEL: | D22 D24 D25 E22 G3 G30 G32 J24 O33 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35684 |
| By: | Irawan, Yenny; , Diana; Fajri, Heri; , Mariana; Aini, Zahriatul (Politeknik Kutaraja); AR, M Yazid |
| Abstract: | This study investigates the influence of BSI Mitraguna financing on the development of micro, small, and medium enterprises (MSMEs) in Aceh, with particular attention to the role of financial literacy. Using a quantitative explanatory research design, the study focuses on active BSI Mitraguna financing recipients in Aceh. Respondents were selected based on specific criteria, including a minimum duration of financing engagement and ongoing MSME operations. Data were gathered through a structured questionnaire using a Likert scale and analyzed using the Structural Equation Modeling--Partial Least Squares (SEM-PLS) method with SmartPLS software. The results reveal that BSI Mitraguna plays a significant role in fostering MSME growth. It not only provides financial capital but also contributes to improving the financial literacy of MSME actors. Furthermore, financial literacy serves as a crucial intermediary, enhancing the effectiveness of financing in driving business development. These findings suggest that microfinance programs are more impactful when integrated with financial education tailored to the specific needs of local entrepreneurs. Ultimately, this study contributes to the growing body of knowledge on Islamic microfinance by demonstrating that the synergy between financing and financial literacy is essential for sustainable MSME development. It also provides practical implications for policymakers and financial institutions to design integrated financing models that not only support capital access but also strengthen entrepreneurial capacity, thereby enhancing long-term economic resilience and inclusive growth |
| Date: | 2026–07–06 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:pr45w_v1 |