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Course on the Foundations of Corporate Policies

I am currently designing a course on the  foundations of corporate policies. The full syllabus is not ready yet.... But here are some key bibliographical references.

 

Sources of financial constraints

  • Acharya, H Almeida, F Ippolito, A Perez. (2014) “Credit lines as monitored liquidity insurance: Theory and evidence,” Journal of Financial Economics 112 (3), 287-319

  • Holmström B and Tirole J., Private and Public Supply of Liquidity, Journal of Political Economy 1998 106:1, 1-40

  • Holmstrom, B. and J. Tirole. 1997. Financial intermediation, loanable funds, and the real sector. Quarterly Journal of Economics 112:663–692: A simple model of debt capacity and credit rationing in the presence of moral hazard

  • Myers, S. 1984. The capital structure puzzle. Journal of Finance 39:573–592.

  • Myers, S. C. and Majluf, N. S. (1984), ‘Corporate financing and investment decisions when firms have information that investors do not have’, Journal of Financial Economics 13(2), 187–221.

  • Myers, Stewart C. 1977. "Determinants of Corporate Borrowing." Journal of Financial Economics. November, 5:2, pp.147-75: Debt overhang and suboptimal investment in the presence of moral hazard

  • Rampini, A. A. and Viswanathan, S. (2010), ‘Collateral, risk management, and the distribution of debt capacity’, The Journal of Finance 65(6), 2293–2322.

  • Tirole J., The Theory of Corporate Finance, Princeton University Press, 2006: A unified framework based on managerial moral hazard

  • Froot, K.A., Scharfstein, D.S. and Stein, J.C., 1993. Risk management: Coordinating corporate investment and financing policies. the Journal of Finance, 48(5), pp.1629-1658.

 

Measuring financial constraints

  • Almeida, H., Campello, M. and Weisbach, M. S. (2004), ‘The cash flow sensitivity of cash’, The Journal of Finance 59(4), 1777–1804.

  • Buehlmaier, M. M. and Whited, T. M. (2018), ‘Are financial constraints priced? evidence from textual analysis’, The Review of Financial Studies 31(7), 2693–2728.

  • Farre-Mensa, J. and Ljungqvist, A. (2016), ‘Do measures of financial constraints measure financial constraints?’, The Review of Financial Studies 29(2), 271–308.

  • Fazzari, S., Hubbard, R. G. and Petersen, B. (1988), ‘Investment, financing decisions, and tax policy’, American Economic Review 78(2), 200–205.

  • Hadlock, C. J. and Pierce, J. R. (2010), ‘New evidence on measuring financial constraints: Moving beyond the kz index’, The Review of Financial Studies 23(5), 1909–1940.

  • Kaplan, S. N. and Zingales, L. (1997), ‘Do investment-cash flow sensitivities provide useful measures of financing constraints?’, The Quarterly Journal of Economics 112(1), 169–215.

  • Lamont, O., Polk, C. and Saaá-Requejo, J. (2001), ‘Financial constraints and stock returns’, The Review of Financial Studies 14(2), 529–554.

  • Nikolov, B., Schmid, L. and Steri, R. (2018b), ‘The sources of financing constraints’, Working Paper.

  • Whited, T. M. and Wu, G. (2006), ‘Financial constraints risk’, The Review of Financial Studies 19(2), 531–559.

 

Financial constraints and the cost of external equity

  • Akhigbe, A. and Whyte, A. M. (2015), ‘Seo announcement returns and internal capital market efficiency’, Journal of Corporate Finance 31, 271–283.

  • Benveniste, L. M., Busaba,W. Y. and Wilhelm Jr,W. J. (2002), ‘Information externalities and the role of underwriters in primary equity markets’, Journal of Financial Intermediation 11(1), 61–86.

  • Brau, J. C. and Fawcett, S. E. (2006), ‘Initial public offerings: An analysis of theory and practice’, The Journal of Finance 61(1), 399–436.

  • Chen, H. C., and Ritter, J. R. (2000). The seven percent solution. The Journal of Finance, 55(3), 1105-1131.

  • Corwin, S. A. (2003), ‘The determinants of underpricing for seasoned equity offers’, The Journal of Finance 58(5), 2249–2279.

  • Corwin, S. A. and Schultz, P. (2005), ‘The role of ipo underwriting syndicates: Pricing, information production, and underwriter competition’, The Journal of Finance 60(1), 443–486.

  • DeAngelo, H., DeAngelo, L. and Stulz, R. M. (2010), ‘Seasoned equity offerings, market timing, and the corporate lifecycle’, Journal of Financial Economics 95(3), 275–295.

  • Eckbo, B. E., Masulis, R. W. and Norli, Ø. (2007), Security offerings, in ‘Handbook of empirical corporate finance’, Elsevier, pp. 233–373.

  • Fama, E. F. and French, K. R. (2005), ‘Financing decisions: who issues stock?’, Journal of financial economics 76(3), 549–582.

  • Hennessy, C. A. and Whited, T. M. (2007), ‘How costly is external financing? evidence from a structural estimation’, The Journal of Finance 62(4), 1705–1745.

  • Lee, G. and Masulis, R. W. (2009), ‘Seasoned equity offerings: Quality of accounting information and expected flotation costs’, Journal of Financial Economics 92(3), 443–469.

  • Li, S., Whited, T. M. and Wu, Y. (2016), ‘Collateral, taxes, and leverage’, The Review of Financial Studies 29(6), 1453–1500.

  • Lowry, M., Michaely, R., Volkova, E. et al. (2017), ‘Initial public offerings: A synthesis of the literature and directions for future research’, Foundations and Trends in Finance 11(3-4), 154–320.

  • Masulis, R. W. and Korwar, A. N. (1986), ‘Seasoned equity offerings: An empirical investigation’, Journal of Financial Economics 15(1-2), 91–118.

  • Ritter, J. R. (2003), ‘Differences between european and american IPO markets’, European Financial Management 9(4), 421–434.

 

Financial constraints and investment

  • Albuquerque, R. and Wang, N. (2008), ‘Agency conflicts, investment, and asset pricing’, The Journal of Finance 63(1), 1–40.

  • Almeida, H. and Campello, M. (2007), ‘Financial constraints, asset tangibility, and corporate investment’, The Review of Financial Studies 20(5), 1429–1460.

  • Bond, S. and Meghir, C. (1994), ‘Dynamic investment models and the firm’s financial policy’, The Review of Economic Studies 61(2), 197–222.

  • Chava, S. and Roberts, M. R. (2008), ‘How does financing impact investment? the role of debt covenants’, The Journal of Finance 63(5), 2085–2121.

  • Clementi, G. L. and Hopenhayn, H. A. (2006), ‘A theory of financing constraints and firm dynamics’, The Quarterly Journal of Economics 121(1), 229–265.

  • Cooper, I., Maio, P. F. and Yang, C. (2018), ‘What drives q and investment fluctuations?’, Working Paper .

  • Fazzari, S., Hubbard, R. G. and Petersen, B. (1988), ‘Investment, financing decisions, and tax policy’, American Economic Review 78(2), 200–205.

  • Gomes, J. F. (2001), ‘Financing investment’, American Economic Review 91(5), 1263–1285.

  • Hennessy, C. A. (2004), ‘Tobin’s q, debt overhang, and investment’, The Journal of Finance 59(4), 1717–1742.

  • Li, D. (2011), ‘Financial constraints, R&D investment, and stock returns’, The Review of Financial Studies 24(9), 2974–3007.

  • Moyen, N. (2004), ‘Investment–cash flow sensitivities: Constrained versus unconstrained firms’, The Journal of finance 59(5), 2061–2092.

  • Myers, S. C. and Majluf, N. S. (1984), ‘Corporate financing and investment decisions when firms have information that investors do not have’, Journal of Financial Economics 13(2), 187–221.

  • Strebulaev, I. A., Whited, T. M. et al. (2012), ‘Dynamic models and structural estimation in corporate finance’, Foundations and Trends in Finance 6(1–2), 1–163.

  • Whited, T. M. (2006), ‘External finance constraints and the intertemporal pattern of intermittent investment’, Journal of Financial Economics 81(3), 467–502.

 

Capital structure dynamics

  • DeAngelo, H., DeAngelo, L. and Whited, T. M. (2011), ‘Capital structure dynamics and transitory debt’, Journal of Financial Economics 99(2), 235–261.

  • Faulkender, M., Flannery, M., Hankins, K. and Smith, J. (2012), ‘Cash flow and leverage adjustments’, Journal of Financial Economics, 103, 632–646

  • Flannery, M. J. and Hankins, K.W. (2013), ‘Estimating dynamic panel models in corporate finance’, Journal of Corporate Finance 19, 1–19.

  • Flannery, M. J. and Rangan, K. P. (2006), ‘Partial adjustment toward target capital structures’, Journal of Financial Economics 79(3), 469–506.

  • Gomes, J., Jermann, U. and Schmid, L. (2016), ‘Sticky leverage’, American Economic Review 106(12), 3800–3828.

  • Halling, M., Yu, J. and Zechner, J. (2016), ‘Leverage dynamics over the business cycle’, Journal of Financial Economics 122(1), 21–41.

  • Hennessy, C. A. and Whited, T. M. (2005), ‘Debt dynamics’, The Journal of Finance 60(3), 1129–1165.

  • Huang, R. and Ritter, J. R. (2009), ‘Testing theories of capital structure and estimating the speed of adjustment’, Journal of Financial and Quantitative Analysis 44(2), 237–271.

  • Ippolito, F., Sacchetto, S. and Steri, R. (2017), ‘Dynamic leverage targets’, Working Paper.

  • Leary, M. T. and Roberts, M. R. (2005), ‘Do firms rebalance their capital structures?’, The Journal of Finance 60(6), 2575–2619.

  • Lemmon, M. L., Roberts, M. R. and Zender, J. F. (2008), ‘Back to the beginning: persistence and the cross-section of corporate capital structure’, The Journal of Finance 63(4), 1575–1608.

  • Strebulaev, I. A., Whited, T. M. et al. (2012), ‘Dynamic models and structural estimation in corporate finance’, Foundations and Trends in Finance 6(1–2), 1–163.

  • Strebulaev, Ilya A., 2007, Do tests of capital structure theory mean what they say?, Journal of Finance 62, 1747-1787.

 

Financial constraints, leverage and equity returns

  • Albuquerque, R. and Wang, N. (2008), ‘Agency conflicts, investment, and asset pricing’, The Journal of Finance 63(1), 1–40.

  • Bhandari, L. C., 1988, Debt/equity ratio and expected common stock returns: Empirical evidence, The Journal of Finance, 43(2), 507{528.

  • Buehlmaier, M. M. and Whited, T. M. (2018), ‘Are financial constraints priced? evidence from textual analysis’, The Review of Financial Studies 31(7), 2693–2728.

  • George, Thomas J. , Chuan-Yang Hwang, A resolution of the distress risk and leverage puzzles in the cross section of stock returns, Journal of Financial Economics, Volume 96, Issue 1, April 2010, Pages 56-79

  • Gomes, J. F., and Schmid, L. (2010). Levered returns. The Journal of Finance, 65(2), 467-494.

  • Gomes, J. F., Yaron, A. and Zhang, L. (2006), ‘Asset pricing implications of firms’ financing constraints’, The Review of Financial Studies 19(4), 1321–1356.

  • Ippolito, F., Steri, R. and Tebaldi, C. (2017), ‘Levered returns and capital structure imbalances’, Working Paper.

  • Lamont, O., Polk, C. and Saaá-Requejo, J. (2001), ‘Financial constraints and stock returns’, The Review of Financial Studies 14(2), 529–554.

  • Li, D. and Zhang, L. (2010), ‘Does q-theory with investment frictions explain anomalies in the cross section of returns?’, Journal of Financial Economics 98(2), 297–314.

  • Livdan, D., Sapriza, H. and Zhang, L. (2009), ‘Financially constrained stock returns’, The Journal of Finance 64(4), 1827–1862.

  • Obreja, I., 2013, Book-to-market equity, nancial leverage, and the cross-section of stock returns, Review of Financial Studies, 26(5), 1146{1189.

  • Ozdagli, A. K. (2012), ‘Financial leverage, corporate investment, and stock returns’, The Review of Financial Studies 25(4), 1033–1069.

  • Whited, T. M. and Wu, G. (2006), ‘Financial constraints risk’, The Review of Financial Studies 19(2), 531–559.

 

Financial constraints and liquidity management

  • Acharya, H Almeida, F Ippolito, A Perez. “Credit lines as monitored liquidity insurance: Theory and evidence,” Journal of Financial Economics 112 (3), 287-319

  • Acharya, V Heitor Almeida, Murillo Campello, Is cash negative debt? A hedging perspective on corporate financial policies, Journal of Financial Intermediation, Volume 16, Issue 4, October 2007, Pages 515-554

  • Bates, T., Kahle, K., & Stulz, R. (2009) Why Do U. S. Firms Hold So Much than They Used To? The Journal of Finance, 64(5), pp. 1985–2021.

  • Disatnik, D,  Ran Duchin, and Breno Schmidt, Cash Flow Hedging and Liquidity Choices, Review of Finance, Vol. 18, No. 2 (April 2014): 715-748

  • Faulkender, M., Flannery, M., Hankins, K. and Smith, J. (2012), ‘Cash flow and leverage adjustments’, Journal of Financial Economics, 103, 632–646

  • Froot, K.A., D.S. Scharfstein & J.C. Stein (1993). ”Risk Management: Coordinating Corporate Investment and Financing Policies”, The Journal of Finance, vol XLVIII, no. 5, 1629-1658.

  • Gamba, A. and Triantis, A. (2008), ‘The value of financial flexibility’, The Journal of Finance 63(5), 2263–2296.

  • Holmström B and Tirole J., Private and Public Supply of Liquidity, Journal of Political Economy 1998 106:1, 1-40

  • Ilya A. Strebulaev, Baozhong Yang, The mystery of zero-leverage firms, Journal of Financial Economics, Volume 109, Issue 1, July 2013, Pages 1-23

  • Nikolov, B. and Whited, T. M. (2014), ‘Agency conflicts and cash: Estimates from a dynamic model’, The Journal of Finance 69(5), 1883–1921.

  • Nikolov, B., Schmid, L. and Steri, R. (2018a), ‘Dynamic corporate liquidity’, Journal of Financial Economics.

  • Rampini, A. A. and Viswanathan, S. (2010), ‘Collateral, risk management, and the distribution of debt capacity’, The Journal of Finance 65(6), 2293–2322.

  • Strebulaev, I. A., Whited, T. M. et al. (2012), ‘Dynamic models and structural estimation in corporate finance’, Foundations and Trends in Finance 6(1–2), 1–163.

 

Payouts

  • Boudoukh, J., Michaely, R., Richardson, M. and Roberts, M. R. (2007), ‘On the importance of measuring payout yield: Implications for empirical asset pricing’, The Journal of Finance 62(2), 877– 915.

  • Fama, E, Kenneth R French, Disappearing dividends: changing firm characteristics or lower propensity to pay?, Journal of Financial Economics, Volume 60, Issue 1, April 2001, Pages 3-43

  • Farre-Mensa, Joan; Michaely, Roni; Schmalz, Martin.  "Payout Policy"  Annual Review of Financial Economics  6  (2014):  75-134.

  • Servaes and Tufano: Survey evidence on dividend policy