Innovating in downturns can affect corporate success because it improves a firm’s position relative to competitors during the recovery period. However, increased uncertainty and more binding financial constraints complicate such innovation activity. I find that past experience with innovation during recessions improves a firm’s ability to invest in R&D when a new downturn hits. This result hold...

In a financial market, it is often changes in the asset price that act as the trigger for transactions or shifts in investment position. For agents with long investment horizons, and under normal market conditions, trades may only occur infrequently, while for other agents, or at times of severe market stress, the timescales involved may be much shorter. We argue that in either case the use of ...

Investors need analytical tools to predict the price and determine trading positions. Candlestick pattern is one of that trends. However, patterns are difficult recognize, some studies show doubts regarding robustness recognizing system. In this study, we tested predictive ability candlestick We use Gramian Angular Field (GAF) encode as images recognize 3-hour 5-hour 6 with Convolutional Neural...

We show theoretically and empirically how real and financial frictions amplify the impact of uncertainty shocks on firms’investment, employment, debt (term structure of debt growth), and cash holding. We start by building a model with real and financial frictions, alongside uncertainty shocks, and show how adding financial frictions to the model almost doubles the negative impact of uncertainty...

Building on previous works on business fluctuations, we study the propagation of financial distress in a geographical setting. We model a network of regions, each populated by interacting heterogeneous agents, varying the level of interregional connectivity. Given the recent financial turmoils and the growing literature on the diffusion of financial crises, our aim is to identify patterns of fa...

The option is a financial derivative, which is regularly employed in reducing the risk of its underlying securities. However, investing in options is still risky. Such risk becomes much more severe for speculators who utilize options as a means of leverage to increase their potential returns. In order to mitigate risk on their positions, the rudimentary concept of financial option insurance is ...

The recent famous financial frauds have demonstrated that in many cases the auditor was either responsible for or an accomplice in their manifestation. Thus, the auditor plays an important role in ensuring a true and fair view regarding the financial position and performance of the company. International standards on auditing indicate that the financial auditor’s main objective is to serve the ...

This paper shows how the rise in individual income risk in the US since the 1980s might help explain the fall in its foreign asset position. The key to this result is endogenous financial deepening in an open economy with participation-constrained domestic financial markets. There, more volatile income makes individuals less inclined to default on financial contracts as this excludes them from ...