Do Measures of Financial Constraints Measure Financial Constraints

By Joan Farre-Mensa, Alexander P. Ljungqvist. 2016

717 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/7979d6a4c5704160b0ff8f5bc386ae822419bc69

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Finance

Citations in the corpus

Corporate investment efficiency: The role of financial development in firms with financing constraints and agency issues in OECD non-financial firms (2019, background): “KZ index identifies firms as financially constrained that have less cash and high leverage, while Whited and Wu (2006) and Hadlock and Pierce (2010) indexes classify firms as constrained that are characterized by less leverage, are younger and smaller (Farre-Mensa & Ljungqvist, 2016).”
Sharing Risk with the Government: How Taxes Affect Corporate Risk Taking (2017, neutral): “We adopt a third approach, pioneered by Asker, Farre-Mensa, and Ljungqvist (2015), Heider and Ljungqvist (2015), and Farre-Mensa and Ljungqvist (2016). The approach exploits the fact that U.”
COVID-19: stock market reactions to the shock and the stimulus (2020, neutral): “Since small firms generally face greater capital constraints than large firms (Fazzari, Hubbard, and Petersen 1988; Farre-Mensa and Ljungqvist 2016; Kaplan and Zingales 1997; Lamont, Polk and SaáRequejo 2001) and given the fact that the Fed stimulus was intended to help small businesses, we examine…”
Are Financial Constraints Priced? Evidence from Textual Analysis (2018, positive): “As pointed out by Farre-Mensa and Ljungqvist (2014), many of the measures based on accounting data are likely flawed.”
The Effect of Financial Constraints on Income Shifting by U.S. Multinationals (2016, methodology): “This specification has the fewest observations because we exclude all firm-years that do not have debt ratings in Compustat, as suggested by Farre-Mensa and Ljungqvist (2013).”
Peer influence on payout policies (2018, methodology): “First, Farre-Mensa and Ljungqvist (2013) find that the five popular traditional proxies of financial constraint (i.e., having a credit rating, paying dividends, and the indices of Kaplan-Zingales, Whited-Wu, and Hadlock-Pierce) do not adequately predict a firm's ability to raise external capital.”
Using 10-K Text to Gauge Financial Constraints (2015, background): “consistent with the findings of Farre-Mensa and Ljungqvist (2015). The two authors present”