Inalienable Customer Capital, Corporate Liquidity, and Stock Returns
Corresponding Author
WINSTON WEI DOU
Correspondence: Winston Wei Dou, University of Pennsylvania, 2318 Steinberg Hall-Dietrich Hall, 3620 Locust Walk, Philadelphia, PA 19104; e-mail: wdou@wharton.upenn.edu.
Search for more papers by this authorDAVID REIBSTEIN
Search for more papers by this authorWEI WU
Winston Wei Dou and David Reibstein are with University of Pennsylvania. Yan Ji is at Hong Kong University of Science and Technology. Wei Wu is with Texas A&M University. The paper was previously circulated as “Customer Capital, Financial Constraints, and Stock Returns.” We are grateful to Wei Xiong (the Editor), an anonymous Associate Editor, and two anonymous referees for constructive suggestions. We thank Hengjie Ai; Markus Baldauf; Frederico Belo; Alex Belyakov; Christa Bouwman; Adrian Buss; Jeffrey Cai; Zhanhui Chen; Will Diamond; Lukasz Drozd; Bernard Dumas; Paolo Fulghieri; Alexandre Garel; Lorenzo Garlappi; Ron Giammarino; Stefano Giglio; Vincent Glode; Itay Goldstein; Naveen Gondhi; Francois Gourio; Jillian Grennan; Po-Hsuan Hsu; Shiyang Huang; Chuan-Yang Hwang; Don Keim; Leonid Kogan; Adam Kolasinski; Doron Levit; Dongmei Li; Kai Li; Xiaoji Lin; Asaf Manela; Neil Morgan; Christian Opp; Pascal Maenhout; Hernan Ortiz-Molina; Carolin Pflueger; Yue Qiu; Adriano Rampini; Nick Roussanov; Leena Rudanko; Dejanir Silva; Alp Simsek; Bruno Solnik; Rob Stambaugh; Roberto Steri; Sheridan Titman; Kumar Venkataraman; Jessica Wachter; Neng Wang; James Weston; Toni Whited; Yu Xu; Jialin Yu; Morad Zekhnini; Lu Zhang; Bart Zhou; John Zhu; as well as seminar participants at HKU, HKUST, INSEAD, NTU, Philadelphia Fed, SMU, Texas A&M, UBC, Wharton, AFA, EFA, CFEA, MFA, NFA, Rising Five-Star Workshop at Columbia, and AMA for their comments. We also thank Michael Sussman, John Gerzema, Anna Blender, and Dami Rosanwo of the BAV Group for sharing the data, and Ed Lebar and Alina Sorescu for guidance on data processing. We thank Dian Yuan, Haowen Dong, and Hezel Gadzikwa for excellent research assistance. Winston Dou is grateful for the financial support of the Rodney L. White Center for Financial Research. The authors do not have conflicts of interest to disclose, as defined in The Journal of Finance disclosure policy.
Search for more papers by this authorCorresponding Author
WINSTON WEI DOU
Correspondence: Winston Wei Dou, University of Pennsylvania, 2318 Steinberg Hall-Dietrich Hall, 3620 Locust Walk, Philadelphia, PA 19104; e-mail: wdou@wharton.upenn.edu.
Search for more papers by this authorDAVID REIBSTEIN
Search for more papers by this authorWEI WU
Winston Wei Dou and David Reibstein are with University of Pennsylvania. Yan Ji is at Hong Kong University of Science and Technology. Wei Wu is with Texas A&M University. The paper was previously circulated as “Customer Capital, Financial Constraints, and Stock Returns.” We are grateful to Wei Xiong (the Editor), an anonymous Associate Editor, and two anonymous referees for constructive suggestions. We thank Hengjie Ai; Markus Baldauf; Frederico Belo; Alex Belyakov; Christa Bouwman; Adrian Buss; Jeffrey Cai; Zhanhui Chen; Will Diamond; Lukasz Drozd; Bernard Dumas; Paolo Fulghieri; Alexandre Garel; Lorenzo Garlappi; Ron Giammarino; Stefano Giglio; Vincent Glode; Itay Goldstein; Naveen Gondhi; Francois Gourio; Jillian Grennan; Po-Hsuan Hsu; Shiyang Huang; Chuan-Yang Hwang; Don Keim; Leonid Kogan; Adam Kolasinski; Doron Levit; Dongmei Li; Kai Li; Xiaoji Lin; Asaf Manela; Neil Morgan; Christian Opp; Pascal Maenhout; Hernan Ortiz-Molina; Carolin Pflueger; Yue Qiu; Adriano Rampini; Nick Roussanov; Leena Rudanko; Dejanir Silva; Alp Simsek; Bruno Solnik; Rob Stambaugh; Roberto Steri; Sheridan Titman; Kumar Venkataraman; Jessica Wachter; Neng Wang; James Weston; Toni Whited; Yu Xu; Jialin Yu; Morad Zekhnini; Lu Zhang; Bart Zhou; John Zhu; as well as seminar participants at HKU, HKUST, INSEAD, NTU, Philadelphia Fed, SMU, Texas A&M, UBC, Wharton, AFA, EFA, CFEA, MFA, NFA, Rising Five-Star Workshop at Columbia, and AMA for their comments. We also thank Michael Sussman, John Gerzema, Anna Blender, and Dami Rosanwo of the BAV Group for sharing the data, and Ed Lebar and Alina Sorescu for guidance on data processing. We thank Dian Yuan, Haowen Dong, and Hezel Gadzikwa for excellent research assistance. Winston Dou is grateful for the financial support of the Rodney L. White Center for Financial Research. The authors do not have conflicts of interest to disclose, as defined in The Journal of Finance disclosure policy.
Search for more papers by this authorABSTRACT
We develop a model in which customer capital depends on key talents' contribution and pure brand recognition. Customer capital guarantees stable demand but is fragile to financial constraints risk if retained mainly by talents, who tend to quit financially constrained firms, damaging customer capital. Using a proprietary, granular brand-perception survey, we construct a firm-level measure of the inalienability of customer capital (ICC) that captures the degree to which customer capital depends on talents. Firms with higher ICC have higher average returns, higher talent turnover, and more precautionary financial policies. The ICC-sorted long-short portfolio's spread comoves with financial constraints factor.
Supporting Information
| Filename | Description |
|---|---|
| jofi12960-sup-0001-OnlineAppendix.pdf1.1 MB | Appendix S1: Internet Appendix. |
| jofi12960-sup-0002-ReplicationCode.rar1.6 MB | Replication Code. |
Please note: The publisher is not responsible for the content or functionality of any supporting information supplied by the authors. Any queries (other than missing content) should be directed to the corresponding author for the article.
REFERENCES
- Aaker, David A., 2012, Building Strong Brands (Simon and Schuster, New York).
- Ai, Hengjie, and Anmol Bhandari, 2018, Asset pricing with endogenously uninsurable tail risks, Working paper w24972, NBER.
- Ai, Hengjie, Mariano Massimiliano Croce, and Kai Li, 2013, Toward a quantitative general equilibrium asset pricing model with intangible capital, Review of Financial Studies 26, 491–530.
- Ai, Hengjie, and Dana Kiku, 2013, Growth to value: Option exercise and the cross section of equity returns, Journal of Financial Economics 107, 325–349.
- Ai, Hengjie, and Rui Li, 2015, Investment and CEO compensation under limited commitment, Journal of Financial Economics 116, 452–472.
- Ai, Hengjie, Kai Li, Jun Li, and Christian Schlag, 2020, The collateralizability premium, Review of Financial Studies 33, 5821–5855.
- Akerlof, George A., and Rachel E. Kranton, 2005, Identity and the economics of organizations, Journal of Economic Perspectives 19, 9–32.
- Albuquerque, Rui, and Hugo A. Hopenhayn, 2004, Optimal lending contracts and firm dynamics, Review of Economic Studies 71, 285–315.
- Alfaro, Ivan, Nicholas Bloom, and Xiaoji Lin, 2018, The finance uncertainty multiplier, NBER Working Paper No. 24571.
- Altinkilic, Oya, and Robert S. Hansen, 2000, Are there economies of scale in underwriting fees? Evidence of rising external financing costs, Review of Financial Studies 13, 191–218.
- Alvarez, Fernando, and Urban J. Jermann, 2000, Efficiency, equilibrium, and asset pricing with risk of default, Econometrica 68, 775–797.
- Alvarez, Fernando, and Urban J. Jermann, 2001, Quantitative asset pricing implications of endogenous solvency constraints, Review of Financial Studies 14, 1117–1151.
- Arrow, Kenneth, 1999, Observations on social capital, in I. Serageldin, and P. Dasgupta, eds.: Social Capital: A Multifaceted Perspective (The World Bank, Washington, DC).
- Babina, Tania, 2020, Destructive creation at work: How financial distress spurs entrepreneurship, Review of Financial Studies 33, 4061–4101.
- Baghai, Ramin, Rui Silva, Viktor Thell, and Vikrant Vig, 2017, Talent in distressed firms: Investigating the labor costs of financial distress, SSRN Working paper.
- Banerjee, Shantanu, Sudipto Dasgupta, and Yungsan Kim, 2008, Buyer-supplier relationships and the stakeholder theory of capital structure, Journal of Finance 63, 2507–2552.
- Baron, Matthew, and Wei Xiong, 2017, Credit expansion and neglected crash risk, Quarterly Journal of Economics 132, 713–764.
- Belo, Frederico, and Xiaoji Lin, 2012, The inventory growth spread, Review of Financial Studies 25, 278–313.
- Belo, Frederico, Xiaoji Lin, and Santiago Bazdresch, 2014, Labor hiring, investment, and stock return predictability in the cross section, Journal of Political Economy 122, 129–177.
- Belo, Frederico, Xiaoji Lin, Jun Li, and Xiaofei Zhao, 2017, Labor-force heterogeneity and asset prices: The importance of skilled labor, Review of Financial Studies 30, 3669–3709.
- Belo, Frederico, Xiaoji Lin, and Maria Ana Vitorino, 2014, Brand capital and firm value, Review of Economic Dynamics 17, 150–169.
- Belo, Frederico, Xiaoji Lin, and Fan Yang, 2019, External equity financing shocks, financial flows, and asset prices, Review of Financial Studies 32, 3500–3543.
- Berk, Jonathan B., Richard C. Green, and Vasant Naik, 1999, Optimal investment, growth options, and security returns, Journal of Finance 54, 1553–1607.
- Berk, Jonathan B., Richard Stanton, and Josef Zechner, 2010, Human capital, bankruptcy, and capital structure, Journal of Finance 65, 891–926.
- Bloom, Nicholas, 2009, The impact of uncertainty shocks, Econometrica 77, 623–685.
- Bloom, Nicholas, and John Van Reenen, 2007, Measuring and explaining management practices across firms and countries, Quarterly Journal of Economics 122, 1351–1408.
- Bolton, Patrick, Hui Chen, and Neng Wang, 2011, A unified theory of Tobin's q, corporate investment, financing, and risk management, Journal of Finance 66, 1545–1578.
- Bolton, Patrick, Hui Chen, and Neng Wang, 2013, Market timing, investment, and risk management, Journal of Financial Economics 109, 40–62.
- Bolton, Patrick, Jose Scheinkman, and Wei Xiong, 2006, Executive compensation and short-termist behaviour in speculative markets, Review of Economic Studies 73, 577–610.
- Bolton, Patrick, Neng Wang, and Jinqiang Yang, 2019a, Investment under uncertainty with financial constraints, Journal of Economic Theory 184, 104912.
- Bolton, Patrick, Neng Wang, and Jinqiang Yang, 2019b, Optimal contracting, corporate finance, and valuation with inalienable human capital, Journal of Finance 74, 1363–1429.
- Bradley, Michael, and Michael Rosenzweig, 1992, The untenable case for chapter 11, Yale Law Review 101, 1043–1089.
- Bronnenberg, Bart J., Jean-Pierre H. Dubé, and Matthew Gentzkow, 2012, The evolution of brand preferences: Evidence from consumer migration, American Economic Review 102, 2472–2508.
- Brown, James R., Gustav Martinsson, and Bruce C. Petersen, 2012, Do financing constraints matter for R&D? European Economic Review 56, 1512–1529.
- Brown, James R., and Bruce C. Petersen, 2011, Cash holdings and R&D smoothing, Journal of Corporate Finance 17, 694–709.
- Brown, Jennifer, and David A. Matsa, 2016, Boarding a sinking ship? An investigation of job applications to distressed firms, Journal of Finance 71, 507–550.
- Buehlmaier, Matthias M. M., and Toni M. Whited, 2018, Are financial constraints priced? Evidence from textual analysis, Review of Financial Studies 31, 2693–2728.
- Buera, Francisco J., and Yongseok Shin, 2013, Financial frictions and the persistence of history: A quantitative exploration, Journal of Political Economy 121, 221–272.
- Campbell, John, Jens Hilscher, and Jan Szilagyi, 2008, In search of distress risk, Journal of Finance 63, 2899–2939.
- Carhart, Mark M., 1997, On persistence in mutual fund performance, Journal of Finance 52, 57–82.
- Carlson, Murray, Adlai Fisher, and Ron Giammarino, 2004, Corporate investment and asset price dynamics: Implications for the cross-section of returns, Journal of Finance 59, 2577–2603.
- Chen, Hui, Winston Dou, Hongye Guo, and Yan Ji, 2020, Feedback and contagion through distressed competition, Working paper, University of Pennsylvania.
- Chevalier, Judith A., and David S. Scharfstein, 1996, Capital-market imperfections and countercyclical markups: Theory and evidence, American Economic Review 86, 703–725.
- Cochrane, John H., 1991, Production-based asset pricing and the link between stock returns and economic fluctuations, Journal of Finance 46, 209–237.
- D'Acunto, Francesco, Ryan Liu, Carolin Pflueger, and Michael Weber, 2018, Flexible prices and leverage, Journal of Financial Economics 129, 46–68.
- Daniel, Kent, and Tobias J. Moskowitz, 2016, Momentum crashes, Journal of Financial Economics 122, 221–247.
- DeMarzo, Peter, and Yuliy Sannikov, 2006, Optimal security design and dynamic capital structure in a continuous-time agency model, Journal of Finance 61, 2681–2724.
- DeMarzo, Peter M., Michael J. Fishman, Zhiguo He, and Neng Wang, 2012, Dynamic agency and the q theory of investment, Journal of Finance 67, 2295–2340.
- Donangelo, Andres, Francois Gourio, Matthias Kehrig, and Miguel Palacios, 2019, The cross-section of labor leverage and equity returns, Journal of Financial Economics 132, 497–518.
- Dou, Winston, and Yan Ji, 2020, External financing and customer capital: A financial theory of markups, Management Science (forthcoming).
10.1287/mnsc.2020.3739 Google Scholar
- Dou, Winston, Yan Ji, and Wei Wu, 2020a, Competition, profitability, and discount rates, Journal of Financial Economics (forthcoming).
- Dou, Winston, Yan Ji, and Wei Wu, 2020b, The oligopoly Lucas tree: Consumption risk and industry-level risk exposure, Working paper, University of Pennsylvania.
- Dumas, Bernard, 1989, Perishable investment and hysteresis in capital formation, NBER Working paper.
- Durlauf, Steven N., 2002, On the empirics of social capital, The Economic Journal 112, F459–F479.
- Durlauf, Steven N., and Marcel Fafchamps, 2005, Social capital, in Philippe Aghion, and Steven Durlauf, eds.: Handbook of Economic Growth (Elsevier, Amsterdam).
10.1016/S1574-0684(05)01026-9 Google Scholar
- Eisfeldt, Andrea L., and Tyler Muir, 2016, Aggregate external financing and savings waves, Journal of Monetary Economics 84, 116–133.
- Eisfeldt, Andrea L., and Dimitris Papanikolaou, 2013, Organization capital and the cross-section of expected returns, Journal of Finance 68, 1365–1406.
- Eisfeldt, Andrea L., and Adriano A. Rampini, 2008, Managerial incentives, capital reallocation, and the business cycle, Journal of Financial Economics 87, 177–199.
- Fama, Eugene F., and Kenneth R. French, 1993, Common risk factors in the returns on stocks and bonds, Journal of Financial Economics 33, 3–56.
- Fama, Eugene F., and Kenneth R. French, 2015, A five-factor asset pricing model, Journal of Financial Economics 116, 1–22.
- Fama, Eugene F., and James D. MacBeth, 1973, Risk, return, and equilibrium: Empirical tests, Journal of Political Economy 81, 607–636.
- Faulkender, Michael, and Rong Wang, 2006, Corporate financial policy and the value of cash, Journal of Finance 61, 1957–1990.
- Favilukis, Jack, and Xiaoji Lin, 2016a, Does wage rigidity make firms riskier? Evidence from long-horizon return predictability, Journal of Monetary Economics 78, 80–95.
- Favilukis, Jack, and Xiaoji Lin, 2016b, Wage rigidity: A quantitative solution to several asset pricing puzzles, Review of Financial Studies 29, 148–192.
- Favilukis, Jack Y., Xiaoji Lin, and Xiaofei Zhao, 2020, The elephant in the room: The impact of labor obligations on credit markets, American Economic Review 110, 1673–1712.
- Fresard, Laurent, 2010, Financial strength and product market behavior: The real effects of corporate cash holdings, Journal of Finance 65, 1097–1122.
- García, Diego, and Øyvind Norli, 2012, Geographic dispersion and stock returns, Journal of Financial Economics 106, 547–565.
- Garlappi, Lorenzo, Tao Shu, and Hong Yan, 2008, Default risk, shareholder advantage, and stock returns, Review of Financial Studies 21, 2743–2778.
- Garlappi, Lorenzo, and Hong Yan, 2011, Financial distress and the cross-section of equity returns, Journal of Finance 66, 789–822.
- Garmaise, Mark J., 2011, Ties that truly bind: Noncompetition agreements, executive compensation, and firm investment, Journal of Law, Economics, and Organization 27, 376–425.
- Gerzema, John, and Edward Lebar, 2008, The Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It (Jossey-Bass, San Francisco, CA).
- Gilchrist, Simon, Raphael Schoenle, Jae Sim, and Egon Zakrajsek, 2017, Inflation dynamics during the financial crisis, American Economic Review 107, 785–823.
- Gilchrist, Simon, and Egon Zakrajšek, 2012, Credit supply shocks and economic activity in a financial accelerator model, in Alan Blinder, Andrew Lo, and Robert Solow, eds.: Rethinking the Financial Crisis (Russell Sage Foundation, New York).
- Gilson, Stuart C., and Michael R. Vetsuypens, 1993, CEO Compensation in financially distressed firms: An empirical analysis, Journal of Finance 48, 425–458.
- Glaeser, Edward L., David Laibson, Jose A. Scheinkman, and Christine L. Soutter, 1999, What is social capital? The determinants of trust and trustworthiness, Harvard Institute of Economic Research Working Papers 1875.
- Gomes, Joao, Leonid Kogan, and Lu Zhang, 2003, Equilibrium cross section of returns, Journal of Political Economy 111, 693–732.
- Gomes, Joao F., 2001, Financing investment, American Economic Review 91, 1263–1285.
- Gomes, Joao F., and Lukas Schmid, 2010, Levered returns, Journal of Finance 65, 467–494.
- Gomes, Joao F., Amir Yaron, and Lu Zhang, 2006, Asset pricing implications of firms' financing constraints, The Review of Financial Studies 19, 1321–1356.
- Gourio, Francois, and Leena Rudanko, 2014, Customer capital, Review of Economic Studies 81, 1102–1136.
- Goyal, Vidhan K., and Wei Wang, 2017, Provision of management incentives in bankrupt firms, Journal of Law, Finance, and Accounting 2, 87–123.
- Graham, John R., 2000, How big are the tax benefits of debt? Journal of Finance 55, 1901–1941.
- Grullon, Gustavo, George Kanatas, and James P. Weston, 2004, Advertising, breadth of ownership, and liquidity, Review of Financial Studies 17, 439–461.
- Hadlock, Charles J., and Joshua R. Pierce, 2010, New evidence on measuring financial constraints: Moving beyond the KZ index, Review of Financial Studies 23, 1909–1940.
- Hall, Bronwyn H., and Josh Lerner, 2010, The financing of R&D and innovation, Handbook of the Economics of Innovation 1, 609–639.
- Hall, Robert E., and Dale W. Jorgenson, 1969, Tax policy and investment behavior: Reply and further results, The American Economic Review 59, 388–401.
- Hamada, Robert S., 1972, The effect of the firm's capital structure on the systematic risk of common stocks, Journal of Finance 27, 435–452.
- Hart, Oliver, and John Moore, 1994, A theory of debt based on the inalienability of human capital, Quarterly Journal of Economics 109, 841–879.
- Henderson, M. Todd, 2007, Paying CEOs in bankruptcy: Executive compensation when agency costs are low, Northwestern University Law Review 101, 1543–1618.
- Hirshleifer, David, Po-Hsuan Hsu, and Dongmei Li, 2013, Innovative efficiency and stock returns, Journal of Financial Economics 107, 632–654.
- Hirshleifer, David, Po-Hsuan Hsu, and Dongmei Li, 2017, Innovative originality, profitability, and stock returns, Review of Financial Studies 31, 2553–2605.
- Holmstrom, Bengt, 1979, Moral hazard and observability, Bell Journal of Economics 10, 74–91.
- Holmstrom, Bengt, and Paul Milgrom, 1987, Aggregation and linearity in the provision of intertemporal incentives, Econometrica 55, 303–328.
- Hou, Kewei, Chen Xue, and Lu Zhang, 2015, Digesting anomalies: An investment approach, Review of Financial Studies 28, 650–705.
- Iyer, Rajkamal, Jose-Luis Peydro, Samuel da Rocha-Lopes, and Antoinette Schoar, 2014, Interbank liquidity crunch and the firm credit crunch: Evidence from the 2007–2009 crisis, Review of Financial Studies 27, 347–372.
- Jenter, Dirk, and Fadi Kanaan, 2015, CEO turnover and relative performance evaluation, Journal of Finance 70, 2155–2184.
- Jermann, Urban, and Vincenzo Quadrini, 2012, Macroeconomic effects of financial shocks, American Economic Review 102, 238–271.
- Jorgenson, Dale, 1963, Capital theory and investment behavior, American Economic Review 53, 247–259.
- Kaplan, Steven N., and Luigi Zingales, 1997, Do investment-cash flow sensitivities provide useful measures of financing constraints? Quarterly Journal of Economics 112, 169–215.
- Keller, Kevin Lane, 2008, Strategic Brand Management: Building, Measuring, and Managing Brand Equity (Pearson Education, London).
- Kogan, Leonid, and Dimitris Papanikolaou, 2014, Growth opportunities, technology shocks, and asset prices, Journal of Finance 69, 675–718.
- Kogan, Leonid, Dimitris Papanikolaou, Amit Seru, and Noah Stoffman, 2017, Technological innovation, resource allocation, and growth, Quarterly Journal of Economics 132, 665–712.
- Koh, Ping-Sheng, and David M. Reeb, 2015, Missing R&D, Journal of Accounting and Economics 60, 73–94.
- Kumar, Praveen, and Dongmei Li, 2016, Capital investment, innovative capacity, and stock returns, Journal of Finance 71, 2059–2094.
- Lach, Saul, and Mark Schankerman, 1989, Dynamics of R&D and investment in the scientific sector, Journal of Political Economy 97, 880–904.
- Larkin, Yelena, 2013, Brand perception, cash flow stability, and financial policy, Journal of Financial Economics 110, 232–253.
- Lev, Baruch, 1974, On the association between operating leverage and risk, Journal of Financial and Quantitative Analysis 9, 627–641.
- Li, Dongmei, 2011, Financial constraints, R&D investment, and stock returns, Review of Financial Studies 24, 2974–3007.
- Li, Guan-Cheng, Ronald Lai, Alexander D'Amour, David M. Doolin, Ye Sun, Vetle I. Torvik, Z. Yu Amy, and Lee Fleming, 2014, Disambiguation and co-authorship networks of the U.S. patent inventor database (1975–2010), Research Policy 43, 941–955.
- Livdan, Dimitry, Horacio Sapriza, and Lu Zhang, 2009, Financially constrained stock returns, Journal of Finance 64, 1827–1862.
- Lovett, Mitchell, Renana Peres, and Ron Shachar, 2014, A data set of brands and their characteristics, Marketing Science 33, 609–617.
- Lustig, Hanno, Chad Syverson, and Stijn Van Nieuwerburgh, 2011, Technological change and the growing inequality in managerial compensation, Journal of Financial Economics 99, 601–627.
- Mandelker, Gershon N., and S. Ghon Rhee, 1984, The impact of the degrees of operating and financial leverage on systematic risk of common stock, Journal of Financial and Quantitative Analysis 19, 45–57.
- Mizik, Natalie, and Robert Jacobson, 2008, The financial value impact of perceptual brand attributes, Journal of Marketing Research 45, 15–32.
- Moll, Benjamin, 2014, Productivity losses from financial frictions: Can self-financing undo capital misallocation? American Economic Review 104, 3186–3221.
- Nagel, Stefan, 2005, Short sales, institutional investors and the cross-section of stock returns, Journal of Financial Economics 78, 277–309.
- Novy-Marx, Robert, 2011, Operating leverage, Review of Finance 15, 103–134.
- Parrino, Robert, 1997, CEO turnover and outside succession a cross-sectional analysis, Journal of Financial Economics 46, 165–197.
- Pástor, Ľuboš, and Robert F. Stambaugh, 2003, Liquidity risk and expected stock returns, Journal of Political Economy 111, 642–685.
- Phillips, Gordon, and Giorgo Sertsios, 2013, How do firm financial conditions affect product quality and pricing? Management Science 59, 1764–1782.
- Rampini, Adriano A., and S. Viswanathan, 2013, Collateral and capital structure, Journal of Financial Economics 109, 466–492.
- Riddick, Leigh A., and Toni M. Whited, 2009, The corporate propensity to save, Journal of Finance 64, 1729–1766.
- Rubinstein, Mark E., 1973, A mean-variance synthesis of corporate financial theory, Journal of Finance 28, 167–181.
- Rudanko, Leena, 2017, The value of loyal customers, FRB Philadelphia Economic Insights 2, 11–17.
- Schularick, Moritz, and Alan M. Taylor, 2012, Credit booms gone bust: Monetary policy, leverage cycles, and financial crises, 1870–2008, American Economic Review 102, 1029–1061.
- Shleifer, Andrei, and Robert W. Vishny, 1990, Equilibrium short horizons of investors and firms, American Economic Review 80, 148–153.
- Sircar, Ronnie, and Wei Xiong, 2007, A general framework for evaluating executive stock options, Journal of Economic Dynamics and Control 31, 2317–2349.
- Sobel, Joel, 2002, Can we trust social capital? Journal of Economic Literature 40, 139–154.
- Stein, Jeremy C., 1988, Takeover threats and managerial myopia, Journal of Political Economy 96, 61–80.
- Stein, Jeremy C., 1989, Efficient capital markets, inefficient firms: A model of myopic corporate behavior, Quarterly Journal of Economics 104, 655–669.
- Tavassoli, Nader T., Alina Sorescu, and Rajesh Chandy, 2014, Employee-based brand equity: Why firms with strong brands pay their executives less, Journal of Marketing Research 51, 676–690.
- Taylor, Lucian A., 2010, Why are CEOs rarely fired? Evidence from structural estimation, Journal of Finance 65, 2051–2087.
- Titman, Sheridan, 1984, The effect of capital structure on a firm's liquidation decision, Journal of Financial Economics 13, 137–151.
- Titman, Sheridan, and Roberto Wessels, 1988, The determinants of capital structure choice, Journal of Finance 43, 1–19.
- Vitorino, Maria Ana, 2014, Understanding the effect of advertising on stock returns and firm value: Theory and evidence from a structural model, Management Science 60, 227–245.
- Weiss, Andrew, 1995, Human capital vs. signalling explanations of wages, Journal of Economic Perspectives 9, 133–154.
- Whited, Toni M., and Guojun Wu, 2006, Financial constraints risk, Review of Financial Studies 19, 531–559.
- Zhang, Lu, 2005, The value premium, Journal of Finance 60, 67–103.
