We study optimal liquidity management, innovation, and production decisions for a continuum of firms facing financing frictions and the threat of creative destruction. We show that while financing frictions prompt firms to decrease production, they may also spur investment in innovation. We examine which types of firms substitute production for innovation in response to negative operating shock...

financing is one of the essential necessitates for science and technology development that many universities have paid attention to it and through establishing financing funds including endowment funds have realized this important issue. so endowment today has played a crucial role in financing and the issue of endowment, benefactors and strategic position of benefactors and donors has been one...

the health sector, a foremost service sector in nigeria, faces a number of challenges; primarily, the persistent under-funding of the health sector by the nigerian government as evidence reveals low allocations to the health sector and poor health system performance which are reflected in key health indices of the country.notwithstanding, there is evidence that the private sector could be a key...

Previous research has argued that debt financing affects equityholders’ investment decisions, producing substantial inefficiency. This paper shows that the size of this inefficiency depends on the degree of investment reversibility. In a dynamic model of financing and investment, the paper provides an upper bound for the inefficiency produced by debt financing. The upper bound is decreasing in ...

BACKGROUND In the transition from a planned economy to a market-oriented economy, China's state funding for health care declined and traditional coverage plans collapsed, leaving China's poor exposed to potentially ruinous health care costs. In reforming health care for the 21st century, equity in health care financing has become a major policy goal. To assess progress towards this goal, this p...

The relationship between venture capital and growth is examined using an endogenous growth model incorporating dynamic contracts between entrepreneurs and venture capitalists. At each stage of financing, venture capitalists evaluate the viability of startups. If viable, VCs provide funding for the next stage. The success of a project depends on the amount of funding. The model is confronted wit...

Insurance has an intertemporal aspect as insurance premia have to be paid upfront. We argue that the financing aspect of insurance is key to understanding basic insurance patterns. In a model with limited enforcement, we show that insurance is globally monotone increasing in household net worth and income, incomplete, and precautionary. These results hold in economies with income risk, durable ...

Entrepreneurs must experiment to learn how good they are at a new activity. What happens when the experimentation is …nanced by a lender? Under common scenarios, i.e., when there is the opportunity to learn by "starting small" or when "no-compete" clauses cannot be enforced ex-post, we show that …nancing experimentation can become harder precisely when it is more pro…table, i.e., for lower valu...