A two-part fractional regression model for the financial leverage decisions of micro, small, medium and large firms

In this paper we examine the following two hypotheses, which traditional theories of capital structure are relatively silent about: (i) the determinants of financial leverage decisions are different for micro, small, medium and large firms; and (ii) the factors that determine whether or not a firm issues debt are different from those that determine how much debt it issues. Using a binary choice model to explain the probability of a firm raising debt and a fractional regression model to explain the relative amount of debt issued, we find strong support for both hypotheses. Confirming recent empirical evidence, we find also that, although larger firms are more likely to use debt, conditional on their having some debt, firm size is negatively related to the proportion of debt used by firms.Capital structure, Financial leverage, Zero leverage, Micro firms, SMEs, Fractional data, Two-part model,

The relative importance of climate change and shrub encroachment on nocturnal warming in the southwestern United States

Many regions of the world are affected by a major land cover change resulting from the encroachment of woody plants and the conversion of grasslands into shrublands. In the southwestern United States, such a change in vegetation cover has been found to increase the winter nighttime temperature, thereby contributing to a positive feedback between shrub encroachment and microclimate in areas encroached by cold-sensitive shrubs. Temperature measurements show that winter minimum temperatures are on average ~2K higher in shrubland than in adjacent grassland sites. It is unclear how the nighttime warming induced by shrub encroachment compares with regional climate trends. We address this question by analysing both the historical and future regional temperature trends in central New Mexico. The estimated regional increase in minimum winter temperature ranges from 1 to 4K per century using observations and climate models. Thus, the warming resulting from shrub encroachment is equivalent to a change in regional climate over a time period of century scale, which suggests that shrub encroachment has an overall important effect on the regional climate