This article systematically examines the importance of exchange rate movements and industry competition for stock returns. Common shocks to industries across countries are more important than competitive shocks due to changes in exchange rates. Weekly exchange rate shocks explain almost nothing of the relative performance of industries. Using returns measured over longer horizons, the importance of exchange rate shocks increases slightly and the importance of industry common shocks increases more substantially. Both industry and exchange rate shocks are more important for industries that produce internationally traded goods, but the importance of these shocks is economically small for these industries as well.

This article investigates the interaction between market entry, company foreclosure, and capital structure in a duopoly. We find that the order in which firms foreclose is determined not only by differences in firm-specific factors, but also by common economic factors, such as the interest rate and the market profit volatility. We extend the exit model by allowing financially distressed firms to renegotiate their debt contracts through a one-off debt exchange offer. We find that firms with high bankruptcy costs or with prospects of profit improvement can get bigger reductions on their debt repayments. Investigating market entry, we find that financial vulnerability of the incumbent induces earlier entry.

This article systematically examines the importance of exchange rate movements and industry competition for stock returns. Common shocks to industries across countries are more important than competitive shocks due to changes in exchange rates. Weekly exchange rate shocks explain almost nothing of the relative performance of industries. Using returns measured over longer horizons, the importance of exchange rate shocks increases slightly and the importance of industry common shocks increases more substantially. Both industry and exchange rate shocks are more important for industries that produce internationally traded goods, but the importance of these shocks is economically small for these industries as well.

Journal Article The Impact of Debt Financing on Entry and Exit in a Duopoly Get access Bart M. Lambrecht Bart M. Lambrecht University of Cambridge Address correspondence to Bart Lambrecht, Judge Institute of Management Studies, Cambridge CB2 1AG, UK, or e-mail: [email protected]. Search for other works by this author on: Oxford Academic Google Scholar The Review of Financial Studies, Volume 14, Issue 3, 1 July 2001, Pages 765–804, https://doi.org/10.1093/rfs/14.3.765 Published: 22 June 2015

This article characterizes optimal dynamic consumption and portfolio decisions in the presence of capital gains taxes and short-sale restrictions. The optimal decisions are a function of the investor's age, initial portfolio holdings, and tax basis. Our results capture the trade-off between the diversification benefits and tax costs of trading over an investor's lifetime. The incentive to rediversify the portfolio is inversely related to the size of the embedded gain and investor's age. Contrary to standard financial advice, the optimal equity holding increases well into an investor's lifetime in our model due to the forgiveness of capital gains taxes at death.

This article characterizes optimal dynamic consumption and portfolio decisions in the presence of capital gains taxes and short-sale restrictions. The optimal decisions are a function of the investor’s age, initial portfolio holdings, and tax basis. Our results capture the trade-off between the diversification benefits and tax costs of trading over an investor’s lifetime. The incentive to rediversify the portfolio is inversely related to the size of the embedded gain and investor’s age. Contrary to standard financial advice, the optimal equity holding increases well into an investor’s lifetime in our model due to the forgiveness of capital gains taxes at death.