NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Adolfo de Motta

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Working Papers

December 2007Financial Structure, Liquidity, and Firm Locations
with Andres Almazan, Sheridan Titman, Vahap Uysal: w13660
This paper investigates the relation between a firm's location and its corporate finance decisions. We develop a simple model where being located within an industry cluster increases opportunities to make acquisitions, and to facilitate those acquisitions, firms within clusters maintain more financial slack. Consistent with our model we find that firms that are located within industry clusters tend to make more acquisitions, and have lower debt ratios and larger cash balances than their industry peers located outside clusters. In addition, we document that firms in growing cities and technology centers also maintain more financial slack. Overall, these findings, which reveal systematic patterns between geography and corporate finance choices, suggest the importance of growth opportunities ...
November 2003Firm Location and the Creation and Utilization of Human Capital
with Andres Almazan, Sheridan Titman: w10106
This paper presents a theory of location choice that draws on insights from the incomplete contracts and investment flexibility (real option) literatures. We provide conditions under which human capital is more efficiently created and better utilized within industrial clusters that contain similar firms. Our analysis indicates that location choices are influenced by the extent to which training costs are borne by firms versus employees as well as by the uncertainty about future productivity shocks and the ability of firms to modify the scale of their operations. Extensions of our model consider, among other things, endogenous technological choices by firms in clusters and how behavioral biases (i.e., managerial overconfidence about their firms' prospects) can affect firms' location choice...

Published: Andres Almazan & Adolfo De Motta & Sheridan Titman, 2007. "Firm Location and the Creation and Utilization of Human Capital," Review of Economic Studies, Blackwell Publishing, vol. 74(4), pages 1305-1327, October.

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