Abstract

http://ssrn.com/abstract=1984063
 
 

References (60)



 
 

Citations (4)



 


 



Aggregate Issuance and Savings Waves


Tyler Muir


Yale University

Andrea L. Eisfeldt


UCLA Anderson School of Management

march 2014


Abstract:     
We use firms' decisions in the cross-section about their sources and uses of funds in order to make inferences about the aggregate cost of external finance. The basic intuition is as follows: Firms which raise costly external finance can invest the issuance proceeds in productive capital assets, or in liquid financial assets with a low physical rate of return. If firms raise costly external finance and allocate some of the funds to liquid assets, either the cost of external finance is relatively low, or the total return to liquidity accumulation, including its value as a hedging asset, is particularly high. We construct and estimate a quantitative, dynamic model of firms' financing and savings decisions. We then use the model's predictions for variation in firm policies and implied cross sectional moments, along with empirical moments from Compustat, to infer the average cost of external finance per dollar raised in the US time series 1980-2010.

Number of Pages in PDF File: 56

Keywords: liquidity management, external finance

JEL Classification: G31, G32, E22

working papers series


Download This Paper

Date posted: January 13, 2012 ; Last revised: March 20, 2014

Suggested Citation

Muir, Tyler and Eisfeldt, Andrea L., Aggregate Issuance and Savings Waves (march 2014). Available at SSRN: http://ssrn.com/abstract=1984063 or http://dx.doi.org/10.2139/ssrn.1984063

Contact Information

Tyler Muir (Contact Author)
Yale University ( email )
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

Andrea L. Eisfeldt
UCLA Anderson School of Management ( email )
110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
Feedback to SSRN


Paper statistics
Abstract Views: 970
Downloads: 182
Download Rank: 92,317
References:  60
Citations:  4
People who downloaded this paper also downloaded:
1. Endogeneity in Empirical Corporate Finance
By Michael Roberts and Toni Whited

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.344 seconds