This paper shows that managers’ personal beliefs and individual characteristics explain a large share of the substantial time-variation of derivatives use beyond firm, industry, and market fundamentals. We construct a panel data set of foreign currency derivatives holdings and currency exposures for U.S. non-financial firms. We use a novel approach to build a firm-specific foreign exchange retu...

Article history: Received 24 January 2011 Received in revised form 3 August 2011 Accepted 3 August 2011 Available online 10 August 2011 This paper analyzes tax competition for foreign direct investment with country risk using a two-country model with different market sizes. We show that the trade-off between country size as a locational advantage and country risk as a locational disadvantage af...

Why do firm growth and exit rates decline with size? What determines the size distribution of firms? This paper presents a theory of firm dynamics that simultaneously rationalizes the basic facts on firm growth, exit, and size distributions. The theory emphasizes the accumulation of industry specific factors in response to industry specific productivity shocks. The emphasis on the accumulation ...

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How important are differences in owner personal characteristics (risk tolerance or optimism) versus the environment in which a firm operates (bankruptcy institutions or access to credit) for firm financial structure, size, owner net-worth and welfare? To answer this question we construct a dynamic, computable model with heterogeneous agents and endogenous default in which entrepreneurs weigh th...

C orporate governance structures in the wake of observed differences in firm ownership structures in developed markets and emerging market economies are distinct. In this paper, we examine the effect of an ownership structure of firms on the market reaction to corporate news flows in the context of emerging market economies like India. We observe the price and volume movements associ...

Production planning is performed through diverse methods according to the type of the system it is structured upon. One of the most important steps before production planning is to determine which system best fits the firm, and how the facilities should be designed. Both job-shop and group-technology systems have their own cons and pros, each of which is suitable to a specific kind of factory. ...