References of "Steri, Roberto 50037122"
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See detailThe Sources of Financing Constraints
Steri, Roberto UL; Nikolov, B.; Schmid, L.

in Journal of Financial Economics (2021)

In order to identify the relevant sources of firms' financing constraints, we ask what financial frictions matter for corporate policies. To that end, we build, solve, and estimate a range of dynamic ... [more ▼]

In order to identify the relevant sources of firms' financing constraints, we ask what financial frictions matter for corporate policies. To that end, we build, solve, and estimate a range of dynamic models of corporate investment and financing, embedding a host of financial frictions. We focus on limited enforcement, moral hazard, and trade-off models. All models share a common technology, but differ in the friction generating financing constraints. Using panel data on Compustat firms for the period 1980-2015 and a more recent dataset on private firms from Orbis, we determine which features of the observed data allow to distinguish among the models, and we assess which model or model combination performs best at rationalizing observed corporate investment and financing policies across various samples. Our tests, based on empirical policy function benchmarks, favor trade-off models for larger Compustat firms, limited commitment models for smaller firms, and moral hazard models for private firms. Our estimates point to significant financing constraints due to agency frictions and highlight the importance of identifying their relevant sources for firm valuation. [less ▲]

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See detailDynamic Corporate Liquidity
Steri, Roberto UL; Nikolov, B.; Schmid, L.

in Journal of Financial Economics (2019), 132(1), 76-102

We examine the determinants of corporate liquidity management through the lens of an estimated dynamic model of corporate investment and financing. When external finance is costly, firms can absorb shocks ... [more ▼]

We examine the determinants of corporate liquidity management through the lens of an estimated dynamic model of corporate investment and financing. When external finance is costly, firms can absorb shocks and cover liquidity needs by holding cash and by drawing down credit lines. In contrast to cash, we model credit lines as providing liquidity contingent on economic news, but limited by collateral constraints and covenants. The option to draw down credit lines creates value as it allows firms to take advantage of investment opportunities in an effective way, facilitating firm growth. We find that our estimated model matches well the levels and joint dynamics of cash, credit lines, leverage, equity financing and investment when firms can collateralize roughly one third of their assets. In the cross-section, the model provides novel empirical predictions and rationalizes a wide range of stylized facts regarding credit line usage, covenant violations, and cash holdings. [less ▲]

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