Digitalization, financing constraints and firm performance

Banking Deregulations, Financing Constraints and Firm Entry Size

We examine the e¤ect of US branch banking deregulations on the entry size of new …rms using micro-data from the US Census Bureau. We …nd that the average entry size for startups did not change following the deregulations. However, among …rms that survived at least four years, a greater proportion of …rms entered either at their maximum size or closer to the maximum size in the …rst year. The ma...

Financing Constraints, Firm Dynamics, Export Decisions, and Aggregate Productivity

We present a dynamic model in which firms accumulate wealth to avoid bankruptcy and to overcome financing constraints that affect their fixed operational costs and the costs of becoming an exporter. Financing constraints not only affect firms directly when they are binding, but also indirectly, through precautionary saving and the selection of firms via entry and exit of the domestic and export...

Testing Financing Constraints on Firm Investment using Variable Capital

A recent literature has criticised the sensitivity of a firm’s investment to its own cash flow as an adequate measure of financing constraints. In this paper we develop a new method to detect the presence of financing constraints at firm level. We consider a structural dynamic model of investment with financing imperfections and with both fixed and variable capital. We solve the model and simul...

Managerial Overconfidence , Agency Problems , Financing Decisions and Firm Performance

Ceo vs. Consumer Confidence: Investment, Financing, and Firm Performance

We examine the effect of aggregate measures of CEO and consumer confidence on firm financing and investment. We find that capital expenditure, merger activity, and financing activity all increase with CEO and consumer confidence. However, while CEO confidence positively predicts future sales growth and return on assets, consumer confidence is negatively related to these performance measures as ...