On Dynamic Risk Management - Investigating the Theory of Collateral Constraints
This paper investigates the theory of collateral constraints developed by Rampini, Sufi, and Viswanathan in their paper Dynamic Risk Management published in 2014. In this theoretical framework, firms are faced with a trade-off between using scarce cash holdings to finance investments and engaging in risk management. Using an updated dataset covering a tumultuous time-period in which oil prices fel
