Firms' inability to commit to future funding choices has profound consequences for capital
structure dynamics. With debt in place, shareholders pervasively resist leverage reductions …

Our model shows that deterioration in debt market liquidity leads to an increase in not only
the liquidity premium of corporate bonds but also credit risk. The latter effect originates from …

Debt maturity influences debt overhang, the reduced incentive for highly levered borrowers
to make real investments because some value accrues to debt. Reducing maturity can …

This paper presents a continuous time model of a firm that can dynamically adjust both its
capital structure and its investment choices. In the model we endogenize the investment …

We characterize equilibrium leverage dynamics in a trade‐off model in which the firm can
continuously adjust leverage and cannot commit to a policy ex ante. While the leverage …

The effects of corporate governance on optimal capital structure choices have been well
documented, though without offering empirical evidence about the impact of corporate …

We develop a structural credit model to examine how interactions between default and
liquidity affect corporate bond pricing. The model features debt rollover and bond-price …

We document several facts about corporate debt maturity:(1) debt maturity is pro-cyclical,(2)
higher-beta firms tend to have longer maturity, and (3) shorter maturity amplifies the …

We provide novel empirical evidence that firms' investment is more responsive to monetary
policy when a higher fraction of their debt matures. In a heterogeneous firm New Keynesian …

A firm chooses its debt maturity structure and default timing dynamically, both without
commitment. Via the fraction of newly issued short-term bonds, equity holders control the …