Sean Cleary
Current Organizations / Institutes
The organizations/institutes from the scholar's latest article
Research Subjects
Research Interests
Sean Cleary has a total of 4 co-authors. Here are the top co-authors by number of shared publications:
- Laurence Booth
Univ Toronto, Rotman Sch Management, 105 St George St, Toronto, ON M5S 3E6, Canada
1 shared publication - Michael Raith
University of Rochester;
1 shared publication - Paul Povel
University of Houston
1 shared publication - Varouj A. Aivazian
Joseph L. Rotman School of Management, University of Toronto, 105 St. George St., Toronto, Ontario M5S 3E6, Canada
1 shared publication
Latest Publications
- 1 March 2007
- Published by Cambridge University Press (CUP) in Journal of Financial and Quantitative Analysis
- Vol. 42 (1) , 1-39
The U-Shaped Investment Curve: Theory and Evidence
We analyze how the availability of internal funds affects a firm's investment. We show that under fairly standard assumptions, the relation is U-shaped: investment increases monotonically with internal funds if they are large but decreases if they are very low. We discuss the tradeoff that generates the U-shape, and argue that models predicting an always increasing relation are based on restrictive assumptions. Using a large data set, we find strong empirical support for our predictions. Our results qualify conventional wisdom about the effects of financial constraints on investment behavior, and help to explain seemingly conflicting findings in the empirical literature.
- 1 March 2007
- Published by Cambridge University Press (CUP) in Journal of Financial and Quantitative Analysis
- Vol. 42 (1) , 1-39
The U-Shaped Investment Curve: Theory and Evidence
We analyze how the availability of internal funds affects a firm's investment. We show that under fairly standard assumptions, the relation is U-shaped: investment increases monotonically with internal funds if they are large but decreases if they are very low. We discuss the tradeoff that generates the U-shape, and argue that models predicting an always increasing relation are based on restrictive assumptions. Using a large data set, we find strong empirical support for our predictions. Our results qualify conventional wisdom about the effects of financial constraints on investment behavior, and help to explain seemingly conflicting findings in the empirical literature.
- 1 June 2006
- Published by Cambridge University Press (CUP) in Journal of Financial and Quantitative Analysis
- Vol. 41 (2) , 439-453
Dividend Smoothing and Debt Ratings
We find that firms that regularly access public debt (bond) markets are more likely to pay a dividend and subsequently follow a dividend smoothing policy than firms that rely exclusively on private (bank) debt. In particular, firms with bond ratings follow a traditional Lintner (1956) style dividend smoothing policy, where the influence of the prior dividend payment is very strong and the current dividend is relatively insensitive to current earnings. In contrast, firms without bond ratings flow through more of their earnings as dividends and display very little dividend smoothing behavior. In effect, they seem to follow a residual dividend policy.
- 1 June 2006
- Published by Cambridge University Press (CUP) in Journal of Financial and Quantitative Analysis
- Vol. 41 (2) , 439-453
Dividend Smoothing and Debt Ratings
We find that firms that regularly access public debt (bond) markets are more likely to pay a dividend and subsequently follow a dividend smoothing policy than firms that rely exclusively on private (bank) debt. In particular, firms with bond ratings follow a traditional Lintner (1956) style dividend smoothing policy, where the influence of the prior dividend payment is very strong and the current dividend is relatively insensitive to current earnings. In contrast, firms without bond ratings flow through more of their earnings as dividends and display very little dividend smoothing behavior. In effect, they seem to follow a residual dividend policy.