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Adriano A. Rampini

Douglas and Josie Breeden Distinguished Professor of Financial Economics
Fuqua School of Business

Selected Publications


Constrained-Efficient Capital Reallocation

Journal Article American Economic Review · February 1, 2023 We characterize efficiency in an equilibrium model of investment and capital reallocation with heterogeneous firms facing collateral constraints. The model features two types of pecuniary externalities: collateral externalities, because the resale price of ... Full text Cite

Risk Management in Financial Institutions

Journal Article Journal of Finance · April 1, 2020 We study risk management in financial institutions using data on hedging of interest rate and foreign exchange risk. We find strong evidence that institutions with higher net worth hedge more, controlling for risk exposures, across institutions and within ... Full text Cite

Financing Insurance

Scholarly Edition · May 2019 Cite

Financing durable assets

Journal Article American Economic Review · February 1, 2019 This paper studies how the durability of assets affects financing. We show that more durable assets require larger down payments making them harder to finance, because durability affects the price of assets and hence the overall financing need more than th ... Full text Cite

Financial Intermediary Capital

Scholarly Edition · January 1, 2019 We propose a dynamic theory of financial intermediaries that are better able to collateralize claims than households, that is, have a collateralization advantage. Intermediaries require capital as they have to finance the additional amount that they can le ... Full text Cite

Dynamic risk management

Journal Article Journal of Financial Economics · February 1, 2014 Both financing and risk management involve promises to pay that need to be collateralized, resulting in a financing versus risk management trade-off. We study this trade-off in a dynamic model of commodity price risk management and show that risk managemen ... Full text Cite

Collateral and capital structure

Journal Article Journal of Financial Economics · August 1, 2013 We develop a dynamic model of investment, capital structure, leasing, and risk management based on firms' need to collateralize promises to pay with tangible assets. Both financing and risk management involve promises to pay subject to collateral constrain ... Full text Cite

Dynamic risk management

Journal Article Journal of Financial Economics · 2013 Cite

Financial Intermediary Capital

Journal Article · November 1, 2011 Cite

Discussion of "From search to match: When loan contracts are too long"

Journal Article Journal of Money, Credit and Banking · October 1, 2011 Full text Cite

Collateral, risk management, and the distribution of debt capacity

Journal Article Journal of Finance · December 1, 2010 Collateral constraints imply that financing and risk management are fundamentally linked. The opportunity cost of engaging in risk management and conserving debt capacity to hedge future financing needs is forgone current investment, and is higher for more ... Full text Cite

Leasing, Ability to Repossess, and Debt Capacity

Journal Article The Review of Financial Studies · April 2009 Cite

Leasing, ability to repossess, and debt capacity

Journal Article Review of Financial Studies · April 1, 2009 This paper studies the financing role of leasing and secured lending.We argue that the benefit of leasing is that repossession of a leased asset is easier than foreclosure on the collateral of a secured loan, which implies that leasing has higher debt capa ... Full text Cite

Managerial hedging and portfolio monitoring

Journal Article Journal of the European Economic Association · March 1, 2008 Incentive compensation induces correlation between the portfolio of managers and the cash flow of the firms they manage. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their firms. We st ... Full text Cite

Collateral, Financial Intermediation, and the Distribution of Debt Capacity

Scholarly Edition · 2008 We study whether borrowers optimally conserve debt capacity to take advantage of investment opportunities due to temporarily low asset prices, when financing is subject to collateral constraints due to limited enforcement. We find that borrowers may exhaus ... Cite

Managerial incentives, capital reallocation, and the business cycle

Journal Article Journal of Financial Economics · January 1, 2008 We argue that when managers have private information about the productivity of assets under their control and receive private benefits, substantial bonuses are required to induce less productive managers to declare that capital should be reallocated. The n ... Full text Cite

New or used? Investment with credit constraints

Journal Article Journal of Monetary Economics · November 1, 2007 Used capital is cheap up front but requires higher maintenance payments later on. We argue that the timing of these investment cash outflows makes used capital attractive to financially constrained firms, since it is cheap when evaluated using their discou ... Full text Cite

Constrained-Efficient Capital Reallocation

Journal Article American Economic Review · February 1, 2023 We characterize efficiency in an equilibrium model of investment and capital reallocation with heterogeneous firms facing collateral constraints. The model features two types of pecuniary externalities: collateral externalities, because the resale price of ... Full text Cite

Risk Management in Financial Institutions

Journal Article Journal of Finance · April 1, 2020 We study risk management in financial institutions using data on hedging of interest rate and foreign exchange risk. We find strong evidence that institutions with higher net worth hedge more, controlling for risk exposures, across institutions and within ... Full text Cite

Financing Insurance

Scholarly Edition · May 2019 Cite

Financing durable assets

Journal Article American Economic Review · February 1, 2019 This paper studies how the durability of assets affects financing. We show that more durable assets require larger down payments making them harder to finance, because durability affects the price of assets and hence the overall financing need more than th ... Full text Cite

Financial Intermediary Capital

Scholarly Edition · January 1, 2019 We propose a dynamic theory of financial intermediaries that are better able to collateralize claims than households, that is, have a collateralization advantage. Intermediaries require capital as they have to finance the additional amount that they can le ... Full text Cite

Dynamic risk management

Journal Article Journal of Financial Economics · February 1, 2014 Both financing and risk management involve promises to pay that need to be collateralized, resulting in a financing versus risk management trade-off. We study this trade-off in a dynamic model of commodity price risk management and show that risk managemen ... Full text Cite

Collateral and capital structure

Journal Article Journal of Financial Economics · August 1, 2013 We develop a dynamic model of investment, capital structure, leasing, and risk management based on firms' need to collateralize promises to pay with tangible assets. Both financing and risk management involve promises to pay subject to collateral constrain ... Full text Cite

Dynamic risk management

Journal Article Journal of Financial Economics · 2013 Cite

Financial Intermediary Capital

Journal Article · November 1, 2011 Cite

Discussion of "From search to match: When loan contracts are too long"

Journal Article Journal of Money, Credit and Banking · October 1, 2011 Full text Cite

Collateral, risk management, and the distribution of debt capacity

Journal Article Journal of Finance · December 1, 2010 Collateral constraints imply that financing and risk management are fundamentally linked. The opportunity cost of engaging in risk management and conserving debt capacity to hedge future financing needs is forgone current investment, and is higher for more ... Full text Cite

Leasing, Ability to Repossess, and Debt Capacity

Journal Article The Review of Financial Studies · April 2009 Cite

Leasing, ability to repossess, and debt capacity

Journal Article Review of Financial Studies · April 1, 2009 This paper studies the financing role of leasing and secured lending.We argue that the benefit of leasing is that repossession of a leased asset is easier than foreclosure on the collateral of a secured loan, which implies that leasing has higher debt capa ... Full text Cite

Managerial hedging and portfolio monitoring

Journal Article Journal of the European Economic Association · March 1, 2008 Incentive compensation induces correlation between the portfolio of managers and the cash flow of the firms they manage. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their firms. We st ... Full text Cite

Collateral, Financial Intermediation, and the Distribution of Debt Capacity

Scholarly Edition · 2008 We study whether borrowers optimally conserve debt capacity to take advantage of investment opportunities due to temporarily low asset prices, when financing is subject to collateral constraints due to limited enforcement. We find that borrowers may exhaus ... Cite

Managerial incentives, capital reallocation, and the business cycle

Journal Article Journal of Financial Economics · January 1, 2008 We argue that when managers have private information about the productivity of assets under their control and receive private benefits, substantial bonuses are required to induce less productive managers to declare that capital should be reallocated. The n ... Full text Cite

New or used? Investment with credit constraints

Journal Article Journal of Monetary Economics · November 1, 2007 Used capital is cheap up front but requires higher maintenance payments later on. We argue that the timing of these investment cash outflows makes used capital attractive to financially constrained firms, since it is cheap when evaluated using their discou ... Full text Cite

Markets as beneficial constraints on the government

Journal Article Journal of Public Economics · May 1, 2006 We study the role of anonymous markets in which trades cannot be monitored by the government. We adopt a Mirrlees approach to analyze economies in which agents have private information and a benevolent government controls optimal redistributive tax policy. ... Full text Cite

Capital reallocation and liquidity

Journal Article Journal of Monetary Economics · April 1, 2006 This paper shows that the amount of capital reallocation between firms is procyclical. In contrast, the benefits to capital reallocation appear countercyclical. We measure the amount of reallocation using data on flows of capital across firms and the benef ... Full text Cite

Exclusive contracts and the institution of bankruptcy

Journal Article Economic Theory · February 1, 2006 The paper studies the institution of bankruptcy when exclusive contracts cannot be enforced ex ante, e.g., a bank cannot monitor whether the borrower enters into contracts with other creditors. The institution of bankruptcy enables the bank to enforce its ... Full text Cite

Default and aggregate income

Journal Article Journal of Economic Theory · June 1, 2005 This paper studies how default varies with aggregate income. We analyze a model in which optimal contracts enable risk sharing of privately observed, idiosyncratic income by allowing for default. Default provisions allow agents with low idiosyncratic incom ... Full text Cite

Capital Reallocation and Liquidity

Journal Article · March 2005 Cite

Managerial Hedging and Portfolio Monitoring

Journal Article · November 2004 Incentive compensation induces correlation between the portfolio of managers and the cash flow of the firms they manage. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their firms. We st ... Cite

Entrepreneurial activity, risk, and the business cycle

Journal Article Journal of Monetary Economics · April 1, 2004 This paper analyzes a model in which the risk associated with entrepreneurial activity implies that the amount of such activity is procyclical and results in amplification and intertemporal propagation of productivity shocks. In the model risk averse agent ... Full text Cite

Entrepreneurial Activity, Risk, and the Business Cycle

Journal Article Journal of Monetary Economics · 2004 Cite

Letting Go: Managerial Incentives and the Reallocation of Capital

Scholarly Edition · 2004 This paper studies the provision of incentives to reallocate capital when managers are reluctant to relinquish control and have private information about the productivity of assets under their control. We show that when managers get private benefits from ... Cite

Endogenous Risk, Incentives and Aggregate Fluctuations

Scholarly Edition This paper analyzes a model in which incentive constrained contracting implies both amplification and intertemporal propagation of technology shocks. In the model risk averse agents choose between a riskless technology and a risky technology (`the ent ... Cite