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Journal Article
Performance and access to government guarantees: the case of small business investment companies
This article analyzes the performance of small business investment companies (SBICs) that are chartered and regulated by the Small Business Administration (SBA). Our principal finding is that poor performance over the 1986-91 period is associated with high usage of funds from the SBA.
Working Paper
Investment and market power
Journal Article
Recent trends in corporate leverage
Journal Article
The increasing importance of retailers' inventories
Although inventory--sales (IS) ratios and inventory volatility have declined somewhat since the early 1980s, little evidence supports the view that declining IS ratios are associated with declines in inventory investment volatility. In the retail sector, IS ratios have risen and inventory investment volatility has, at best, not increased, pointing to a more significant role in future cyclical fluctuations.
Working Paper
Inventories and output volatility
Analyzing disaggregate data on inventories and sales from the U.S. manufacturing and trade sector between 1960 and 1997 yields four main findings. First, I find that IS ratios are somewhat lower after 1984: 1 among durable goods manufacturers and durable goods retailers outside the motor vehicle industry. Second, I find that industries which have lowered their IS ratios tend to be those in which the variance of output relative to sale has declined. Third, by decomposing the variance of output into its components, I find that the variance of sales is less important, and the variance of ...
Journal Article
How are small firms financed? Evidence from small business investment companies
This article examines the investment decisions of small business investment companies (SBICs). The results indicate that potential costs of contracting among SBICs, small firms, and others may have significant effects on how small firms are funded. For instance, projects generating tangible assets and firms operating in industries with few growth opportunities are more likely to be financed with debt than nondebt.
Working Paper
The security issue decision: evidence from small business investment companies
Using a unique transactions-level dataset, this paper examines the investment choices of small business investment companies (SBICs), which are private venture capital firms licensed and regulated by the U.S. Small Business Administration (SBA). SBICs make debt and equity investments in small businesses, and we seek to explain their security choices. We focus on factors suggested by asymmetric information and contracting theories of security choice. Overall, our results are consistent with the predictions of contracting theory, although certain aspects of our results also support asymmetric ...