We examine the deregulation of short-selling in the Chinese stock market, and find that short-
selling activities can reduce the default risk of the underlying companies. Such an effect is …

This paper examines the effect of debt and liquidity on corporate investment in a continuous-
time framework. We show that stockholder–bondholder agency conflicts cause investment …

The concept of debt overhang (that is, an equity‐maximizing levered firm will under‐invest
relative to a firm‐value‐maximizing firm) is well established in the literature. A number of …

We model the relationship between operating and financial leverage. When operating
leverage is exogenously specified, financial leverage is a monotonically decreasing function …

Because Chapter 11 reorganization permits abrogation of long-term contracts, it provides
otherwise constrained firms an opportunity to downsize, creating a non-financial link …

Finished-good inventory is very common under market uncertainty. We build a continuous-
time model to study how the inventory will impact firm value and investment decisions. Our …

This paper examines the impact of pre‐emptive competition for a leader's position on the
investment strategies for market entry, production capacities, and product differentiation. In …

How does the prospect of Chapter 11 reorganization influence the capital investment
decisions of oligopolistic firms? Economists agree that bankruptcy policy matters for ex ante …

This paper presents the problem of finding the minimum cost dispatch and commitment of
power generation units in a transmission network with active switching. We use the term …

This paper examines how technological uncertainty affects current investment; specifically,
what is the impact on a firm's investment in an existing technology when an improved …