There is wide debate over the causes and ultimate importance of the pecking order and debt conservatism to firm financing decisions. We argue that these empirical patterns are not driven solely by firmand market level variation, but are also linked to individual managerial characteristics. We relate the reluctance of (some) managers to access external capital markets, and particularly equity ma...

We review the recent literature on the financing of innovation, inclusive of large companies and new startups. This research strand has been very active over the past five years, generating important new findings, questioning some long-held beliefs, and creating its own puzzles. Our review outlines the growing body of work that documents a role for debt financing related to innovation. We highl...

This study models firm’s financing policy and investment level when manager and outside investors has disagreement. It shows that the firm is more likely to over invest when the level of disagreement is high, and prefers debt financing; while under invests with lower disagreement level and tends to equity financing. Compared with selffinancing, investment at firm level decreases, the over (unde...

Using an intertemporal model of investment decisions under financing constraints we show that the Euler equation approach can be used to identify the effect of financing constraints on investment returns even when the premium on external financing does not change over time. This result is made possible by the introduction of a tangibility constraint to a commonly used dynamic optimization model...

Highly variable returns, asymmetric information and a lack of collateral should cause small high-tech firms to have poor access to debt. New equity financing has several advantages over debt, but may be costly compared to internal finance. We examine an unbalanced panel of over 2,400 publicly traded United States high-tech companies over the period 1981 to 1998. Most small high-tech firms obtai...

In this paper we investigate the interplay between operations and financial decisions within the context of a two-echelon supply chain. A retailer purchases a single product from a supplier and afterwards sells it in the retail market to a random demand. The retailer, however, is budget-constrained and is therefore limited in the number of units that he may purchase from the supplier. We invest...

External financing is important when inventors and small technology-based firms commercialize their inventions. However, the private information of inventors about the quality of their products causes information asymmetries and moral hazard problems. To help compensate for potentially non-existing capital markets, the Swedish Government has intervened by offering loans with different terms to ...

Abstract T his paper contributes to the existing literature by examining the determinants of health financing in 177 developed and developing countries. The study introduces the variables of government effectiveness and control of corruption to capture the impact of governance quality on different mechanisms of health financing. Utilisng panel data analysis, namely system...

This study attempts to investigate the effect of oil returns and external debt on the government expenditure in Syria over the period 1970-2010. The Johansen cointegration test showed that oil returns and external debt have a positive and significant long run relationship with government expenditure. The Granger causality test indicates unidirectional short-run causality relationships running f...