Article history: Received 4 July 2009 Received in revised form 26 May 2012 Accepted 3 August 2012 Available online 5 October 2012 Controlling for country-level governance, we investigate how firms' corporate governance influences financing constraints. Using firm-level corporate governance rankings across 14 emerging markets, we find that better corporate governance lowers the dependence of eme...

General Equilibrium asset pricing models have a difficult time simultaneously delivering a sizable equity premium, a low and counter-cyclical real risk free rate, as well as cyclical variation in return volatility. To explain these stylized facts, this paper introduces occasionally binding financing constraints that impede producers’ ability to invest in an otherwise standard real business cycl...

We provide novel evidence on how frictions in the financing of working capital amplify and propagate the effect of economic shocks over time. We propose a test for this idea in a situation where firms must pay for inputs in advance of production, and face credit constraints and seasonal variation in profitability. Persistent input price shocks lead to stronger immediate and longer-term drops on...

The world financial crisis initiated in 2008 may have affected the international financing mix of firms in Brazil and their determinants, given its aftereffects. Financial crisis are recurrent events with varying degrees of severity. Many public Brazilian firms use international financing in their capital structure mix and it is relevant to understand their behavior during international crises....

How to finance and provide health care for the more than 1.3 billion rural poor and informal sector workers in low- and middle-income countries is one of the greatest challenges facing the international development community. This article presents the main findings from an extensive survey of the literature of community financing arrangements, and selected experiences from the Asia and Africa r...

We study the provision of an excludable public good to discuss whether the imposition of participation constraints is desirable. It is shown that this question may equivalently be cast as follows: should a firm that produces a public good receive tax revenues, or face a self-financing requirement. The main result is that the desirability of participation constraints is shaped by an equity-effic...

Propagation in equilibrium models of search unemployment is significantly altered when vacancy costs require some external financing on frictional credit markets. The easing of financing constraints during an expansion reduces the opportunity cost of resources allocated to job creation, raising the elasticity of market tightness through (i) a cost channel, increasing incentive to recruit for a ...