We examine firm valuation with optimal liquidity (retained earnings) and dividend choice under revenue uncertainty that incorporates debt financing and bankruptcy costs. We revisit the conditions for dividend policy irrelevancy and the role of retained earnings and dividends. Retained earnings have a net positive impact on firm value in the presence of growth options, high external financing co...

We propose a rationale for why firms often return to the equity market shortly after their initial public offering (IPO). argue that hard value conduct smaller IPOs, and they conditional on positive valuation signal. This is driven by two-way learning, as information complements both corporate disclosure internal available management. In contrast prior studies, we find asymmetry not necessary c...

There is increasing advocacy for community-based health insurance (CBHI) schemes as part of a broader solution to health care financing problems in low-income countries, but to date there is very limited understanding of how CBHI schemes interact with other elements of a health care financing system. This paper aims to set out a preliminary conceptual framework for understanding such interactio...

Using a large firm-level panel dataset from the Chinese National Bureau of Statistics, we examine the effect of financial distortions on FDI inflows in China’s labor-intensive industries. Following Whited and Wu (2006), we estimate the investment Euler equation and construct a financing constraint index for each firm. We find that among domestic firms, the financing constraint index is highest ...

We develop a theory of optimal financing for R&D-intensive firms that uses their unique features—large capital outlays, long gestation periods, high upside, and low probabilities of R&D success—that explains three prominent stylized facts about these firms: their relatively low use of debt, large cash balances, and underinvestment in R&D. The model relies on the interaction of the unique featur...

I present a model of venture capital contracting in which contracts that involve a mixture of both debt and equity are efficient and dominate pure-equity and pure-debt financing. The optimal contract balances the venture capitalist’s incentive to intervene in the project and the entrepreneur’s desire for control. JEL classification: G24, G32

National and international decisions on financing for sexual and reproductive health (SRH) services have profound effects on the type, unit costs and distribution of SRH commodities and services produced, and on their availability and consumption. Much international and national funding is politically driven and is doing little for equity and quality improvement. Financing remains a significant...

This study models firm’s financing policy and investment level when manager and outside investors has disagreement. It shows that the firm is more likely to over invest when the level of disagreement is high, and prefers debt financing; while under invests with lower disagreement level and tends to equity financing. Compared with selffinancing, investment at firm level decreases, the over (unde...