Large heterogeneity has prevented current capital structure research from explaining variations in firms’ capital structures to a satisfactory degree. We find that firms generally fall into two categories based on their capital structure policies. One category consists of larger firms that tend to pay dividends, and includes almost all zero-leverage firms in the sample. These firms tend to resp...

The sampling strategies in many randomized matrix algorithms are, either explicitly or implicitly, controlled by statistical quantities called leverage scores. We present four bounds for the sensitivity of leverage scores as well as an upper bound for the principal angles between two matrices. These bounds are expressed by considering two real m×n matrices of full column rank, A and B. Our boun...

Under the background that international economy is in great recession and new development pattern of domestic double circulation has gradually become a consensus macro-economy normal, this paper investigates 31 provinces cities' policies residents' leverage ratio recent ten years, analyzes direction extent industrial policy, fiscal policy monetary on by using stata, matlab other software. The q...

We develop a dynamic model to assess the effects of liquidity and leverage requirements on banks’ insolvency risk. The model features endogenous capital structure, liquid asset holdings, payout, and default decisions. In the model, banks face taxation, flotation costs of securities, and default costs. They are financed with equity, insured deposits, and risky debt. Using the model, we show that...

outbreak of 2009 european sovereign debt (leverage) crisis has been one of the most crucial economic events of recent years. accordingly, researchers devoted a great deal of efforts to elucidate origins and consequences of this crisis, particularly focusing on its potential effect on international trade flows. yet in the literature, there have been rare studies on exploring the effects of sover...

We analyze equilibrium leverage dynamics in a dynamic tradeoff model when the firm is unable to commit to a leverage policy ex ante. We develop a methodology to characterize equilibrium equity and debt prices in a general jump-diffusion framework, and apply our approach to the standard Leland (1998) setting. Absent commitment, the leverage ratchet effect (Admati et al. 2015) causes firms to tak...

This paper provides a theory of endogenous leverage through rehypothecation in collateralized intermediation. Overcollateralization with an rehypothecation option arises as an optimal contract form between broker dealers and their clients to mitigate adverse selection on collateral quality. Such contract prevents the broker dealers from taking advantage of private information on collateral qual...

Financial frictions can reduce aggregate productivity, in particular when firms with high productivity cannot borrow against their profits. This paper investigates the quantitative importance of this form of borrowing constraint using a large panel of firms in Japan. The firms are young and unlisted, precisely the firms for which credit frictions are expected to be the most severe. In this data...