We estimate the sensitivity of investment to the cost of outside equity for young firms. For estimation, we exploit differences across firms in eligibility to a new tax relief program for individual outside investors in the UK. On average, investment increases 1.5% in response to a 10% drop in the cost of outside equity. This average conceals substantial heterogeneity: 1% of eligible firms issu...

The current research seeks to investigate the influence of debt financing (as assessed by debt-equity ratio) on financial performance as evaluated ROA and ROE. information was taken from yearly reports issued Saudi Arabian oil companies between 2012 2019. ratio (CR) also incorporated an interaction variable in research. findings indicate that has a detrimental business performance. Furthermore,...

We develop a general model of lending in the presence of endogenous borrowing constraints. Borrowing constraints arise because borrowers face limited liability and debt repayment cannot be perfectly enforced. In the model, the dynamics of debt are closely linked with the dynamics of borrowing constraints. In fact, borrowing constraints must satisfy a dynamic consistency requirement: the value o...

We develop a general model of lending in the presence of endogenous borrowing constraints. Borrowing constraints arise because borrowers face limited liability and debt repayment cannot be perfectly enforced. In the model, the dynamics of debt are closely linked with the dynamics of borrowing constraints. In fact, borrowing constraints must satisfy a dynamic consistency requirement: The value o...

We study optimal security design by an informed issuer when the investor faces Knightian uncertainty about the distribution of cash flows and demands robustness: she evaluates each security by the worst-case distribution at which she could justify it being offered by the issuer. First, we show that both standard outside equity and standard risky debt arise as equilibrium securities. Thus, the m...

We investigate the relationship between household debt and health outcomes for OECD countries over the period 1995 to 2012. Using a dataset of aggregated, standardized and objective measures of household debt and health outcomes, we estimate an instrumental variable (GMM) model in order to deal with endogeneity and reverse causality concerns between health and debt. We find that higher househol...