How does competition affect innovation and how it is financed in R&D-intensive firms? We study the interaction between competition, R&D investments, and the financing choices of such firms using data on biopharmaceutical firms. Motivated by existing theories, we develop several empirically testable hypotheses. The key predictions are that, as competition increases, R&D-intensive firms will: (1)...

We consider a firm that operates a single plant and has an expansion option to invest in a new plant with convertible debt financing. This conversion feature introduces another complication not only because of the added conversion timing problem (by the bond holder) but also because the equity holder needs to take future conversion into account when evaluating her expansion/financing decision. ...

We examine the validity of a macroeconomic version of the ModiglianiMiller theorem. By this we understand that different equilibrium capital structures have no impact on the allocation of commodities and on welfare. We develop a general equilibrium model with two production sectors, riskaverse households, and financial intermediation by banks. Banks are funded by deposits and (outside) equity a...

We build a general equilibrium model of investment and capital accumulation in emerging economies. The infinite horizon model features a financial friction, namely that entrepreneurs can only raise debt that they can credibly repay given an outside option such as an investment in the traditional sector of the emerging economy. We show that when lending rates are low, the pure market outcome can...

This paper explores the interaction between fiscal policy and unemployment. It develops a novel dynamic model in which unemployment can arise but can be mitigated by tax cuts and public spending increases. Such policies are fiscally costly, but can be financed by issuing government debt. In the context of this model, the paper analyzes the simultaneous determination of fiscal policy and unemplo...

As guided by the Capital Structure theory, in order to obtain external financing, SMEs may either select debt type of financing or equity financing. Since typical SME cannot meet requirements be listed on Lusaka Stock Exchange, Private Equity remains an attainable source finance for who do not want financed with debt. This study aimed analyse perceptual preference private as alternative SMEs. T...

This study examined how to enhance the performance of food and beverage companies through debt capital in Nigeria. The used secondary data sourced from financial statements selected foods beverages between 2012 2021. A sample four (4) listed firms was purposively population eight (8) manufacturing on Nigerian Exchange Group Plc as 31st December 2021 based availability data. employed panel model...

The theory of mergers and acquisitions (M&As) has been developed almost exclusively from the study of large deals by large firms. In this paper we argue that the behaviour and success of M&As by small and medium sized enterprises (SMEs) may be significantly different. Accordingly, we revisit established M&A theories, and develop a theoretical framework, and several testable hypotheses, regardin...

The Heavily Indebted Poor Countries (HIPC) Initiative, which was launched in 1996, is the first comprehensive effort by the international community to reduce the external debt of the world's poorest countries. The Initiative will generate substantial savings relative to current and past public spending on health and education in these countries. Although there is ample scope for raising public ...

Inflation depends generically on current and expected monetary and fiscal policies. There are three ways to carry $1 today into the future: money, bonds, and real assets. That dollar’s purchasing power varies inversely with the price level. The real return on money depends on the flow of transactions services it supports and the expected inflation rate; the analogous return on bonds is the nomi...