Personne

Erwan Morellec

Publications associées (31)

Relationship Capital and Financing Decisions

Lending relationships matter for firm financing. In a model of debt dynamics, we study how lending relationships are formed and how they impact the joint choice of leverage and debt maturity, thereby rationalizing recent empirical findings and generating n ...

Institute for Operations Research and the Management Sciences (INFORMS)2025

The Dynamics of Loan Sales and Lender Incentives

Erwan Morellec

How much of a loan should a lender retain, and how do loan sales affect loan performance? We address these questions in a model in which a lender originates loans that it can sell to investors. The lender reduces default risk through screening at originati ...

Oxford Univ Press Inc2024

Takeover Protections and Asset Prices

Erwan Morellec

We study the effects of takeover feasibility on asset prices and returns in a unified framework. We show theoretically that takeover protections increase equity risk, stock returns, and bond yields by removing a valuable put option to sell the firm, notabl ...

Informs2024

Asset life, leverage, and debt maturity matching

Erwan Morellec, Jakub Hajda

Capital ages and must eventually be replaced. We propose a theory of financing in which firms borrow to finance investment and deleverage as capital ages to have enough financial slack to finance replacement investments. To achieve these dynamics, firms is ...

Elsevier Science Sa2024

Can Corporate Debt Foster Innovation and Growth?

Erwan Morellec

Recent empirical studies have shown that innovative firms heavily rely on debt financing. Debt overhang implies that debt hampers innovation by incumbents. A second effect of debt is that it stimulates innovation by entrants. Using a Schumpeterian growth m ...

OXFORD UNIV PRESS INC2022

Understanding Cash Flow Risk

Erwan Morellec

Theory has recently shown that corporate policies should depend on firms' exposure to short- and long-lived cash flow shocks and the correlation between these shocks. We provide granular estimates of these parameters for Compustat firms using a new filter ...

OXFORD UNIV PRESS INC2022

Optimal financing with tokens

Erwan Morellec

We develop a model in which a start-up firm issues tokens to finance a digital platform, which creates agency conflicts between platform developers and outsiders. We show that token financing is preferred to equity financing unless the platform expects str ...

ELSEVIER SCIENCE SA2021

Short-term debt and incentives for risk-taking

Erwan Morellec, Francesca Maria Zucchi

We challenge the view that short-term debt curbs moral hazard and demonstrate that, in a world with financing frictions and fair debt pricing, short-term debt generates incentives for risk-taking. To do so, we develop a model in which firms are financed wi ...

ELSEVIER SCIENCE SA2020

Agency conflicts and short- versus long-termism in corporate policies

Erwan Morellec

We build a dynamic agency model in which the agent controls both current earnings via short-term investment and firm growth via long-term investment. Under the optimal contract, agency conflicts can induce short- and long-term investment levels beyond firs ...

ELSEVIER SCIENCE SA2020

Product Market Competition and Option Prices

Erwan Morellec

Most firms face some form of competition in product markets. The degree of competition a firm faces feeds back into its cash flows and affects the values of the securities it issues. Through its effects on stock prices, product market competition affects t ...

OXFORD UNIV PRESS INC2019

Agency conflicts around the world

Erwan Morellec, Boris Nikolov

We use a dynamic model of financing decisions to measure agency conflicts for a large panel of 12,652 firms from 14 countries. Our estimates show that agency conflicts are large and vary significantly across firms and countries. Differences in agency confl ...

2018

Corporate policies with permanent and transitory shocks

Erwan Morellec

We model the financing, cash holdings, and hedging policies of a firm facing financing frictions and subject to permanent and transitory cash flow shocks. The permanent and transitory shocks generate distinct, sometimes opposite, effects on corporate polic ...

2017

Bank capital, liquid reserves, and insolvency risk

Erwan Morellec, Julien Hugonnier

2017

Debt enforcement, investment, and risk taking across countries

Erwan Morellec, Philip Valta

We argue that the prospect of an imperfect enforcement of debt contracts in default reduces shareholder-debtholder conflicts and induces leveraged firms to invest more and take on less risk as they approach financial distress. To test these predictions, we ...

2017

Capital supply uncertainty, cash holdings, and investment

Erwan Morellec, Semyon Malamud, Julien Hugonnier

We develop a dynamic model of investment, financing, and cash management decisions in which investment is lumpy and firms face capital supply uncertainty. We characterize optimal policies explicitly, demonstrate that smooth-pasting conditions may not guara ...

2015

Credit market frictions and capital structure dynamics

Erwan Morellec, Semyon Malamud, Julien Hugonnier

We study the implications of credit market frictions for the dynamics of corporate capital structure and the risk of default of corporations. To do so, we develop a dynamic capital structure model in which firms face uncertainty regarding their ability to ...

2015

Financing Investment: The choice between bonds and bank loans

Erwan Morellec, Philip Valta

We build a model of investment and financing decisions to study the choice between bonds and bank loans in a firm's marginal financing decision and its effects on corporate investment. We show that firms with more growth options, with higher bargaining pow ...

2015

Capital Supply Uncertainty, Cash Holdings, and Investment

Erwan Morellec, Semyon Malamud, Julien Hugonnier

We develop a model of investment, financing, and cash management decisions in which investment is lumpy and firms face uncertainty regarding their ability to raise funds in the capital markets. We characterize optimal policies explicitly and show that the ...

2013

Corporate governance and capital structure dynamics

Erwan Morellec, Boris Nikolov, Norman Schuerhoff

We develop a dynamic tradeoff model to examine the importance of managershareholder conflicts in capital structure choice. In the model, firms face taxation, refinancing costs, and liquidation costs. Managers own a fraction of the firms equity, capture par ...

2012

Credit Market Frictions and Capital Structure Dynamics

Erwan Morellec, Semyon Malamud, Julien Hugonnier

2012