Traditional inventory models focus on operational decisions. In this research, we propose a general framework for incorporating financial states of an organization in multi-period inventory models with lost sales. This approach differs from the traditional ones in that operational decisions are correlated with and constrained by financial flows of the firm. We study the borrowing and and lendin...

Pledgeable assets support more borrowing, which allows for further investment in pledgeable assets. We use this credit multiplier to identify the impact of …nancing frictions on corporate investment. The multiplier suggests that investment–cash ‡ow sensitivities should be increasing in the tangibility of …rms’assets (a proxy for pledgeability), but only if …rms are …nancially constrained. Our e...

We examine exogenous changes in state corporate income taxes over the 1988-2006 period and find that tax decreases significantly boost both the quantity, measured by the number of patents, and the quality, measured by citations per patent, of innovative output, while tax increases have little impact on innovation. Most of the impact of tax changes on innovation occurs two or more years after th...