【正文】 ce risk for a large sample of nonfinancial corporations in the United States from 1964 to 2021. We estimate both structural and reduced form models to examine the endogenous nature of corporate financial characteristics such as total debt, debt maturity, cash holdings, and dividend policy. We find that the observed levels of equity price risk are explained primarily by operating and asset characteristics such as firm age, size, asset tangibility, as well as operating cash flow levels and volatility. In contrast, implied measures of financial risk are generally low and more stable than debttoequity ratios. Our measures of financial risk have declined over the last 30 years even as measures of equity volatility . idiosyncratic risk have tended to increase. Consequently, documented trends in equity price risk are more than fully accounted for by trends in the riskiness of firms’ assets. Taken together, the results suggest that the typical . firm substantially reduces financial risk by carefully managing financial policies. As a result, residual financial risk now appears negligible relative to underlying economic risk for a typical nonfinancial firm. Keywords： Capital structure； financial risk； risk management；corporate finance Introduction The financial crisis of 2021 has brought significant attention to the effects of financial leverage. There is no doubt that the high levels of debt financing by financial institutions and households significantly contributed to the crisis. Indeed, evidence indicates that excessive leverage orchestrated by major global banks ., through the mortgage lending and collateralized debt obligations and the socalled “shadow banking system” may be the underlying cause of the recent economic and financial dislocation. Less obvious is the role of financial leverage among nonfinancial firms. To date, problems in the . nonfinancial sector have been minor pared to the distress in the financial sector despite the seizing of capital markets during the crisis. For example, nonfinancial bankruptcies have been limited given that the economic decline is the largest since the great depression of the 1930s. In fact, bankruptcy filings of nonfinancial firms have occurred mostly in . industries ., automotive manufacturing, newspapers, and real estate that faced fundamental economic pressures prior to the financial crisis. This surprising fact begs the question, “How important is financial risk for nonfinancial firms?” At the heart of this issue is the uncertainty about the determinants of total firm risk as well as ponents of firm risk. Recent academic research in both asset pricing and corporate finance has rekindled an interest in analyzing equity price risk. A current strand of the asset pricing literature examines the finding of Campbell et al. 2021 that firmspecific idiosyncratic risk has tended to increase over the last 40 years. Other work suggests that idiosyncratic risk may be a priced risk factor see Goyal and SantaClara, 2021, among others . Also related to these studies is work by P225。stor and Veronesi 2021 , we find that firms with higher profitability and lower profit volatility have lower equity volatility. This suggests that panies with higher and more stable operating cash flows are less likely to go bankrupt, and therefore are potentially less risky. Among economic risk variables, the effects of firm size, profit volatility, and dividend policy on equity volatility stand out. Unlike some previous studies, our careful treatment of the endogeneity of financial policy confirms that leverage increases total firm risk. Otherwise, financial risk factors are not reliably related to total risk. Given the large literature on financial policy, it is no surprise that financial variables are,at least in part, determined by the economic risks firms take. However, some of the specific findings are unexpected. For example, in a simple model of capital structure, dividend payouts should increase financial leverage since they represent an outflow of cash from the firm ., increase debt . We find that dividends are associated with lower risk. This suggests that paying dividends is not as much a product of financial policy as a characteristic of a firm’s operations ., a mature pany with limited growth opportunities . We also estimate how sensitivities to different risk factors have changed over time. Our results indicate that most relations are fairly stable. One exception is firm age which prior to 1983 tends to be positively related to risk and has since been consistently negatively related to risk. This is related to findings by Brown and Kapadia 2021 that recent trends in idiosyncratic risk are related to stock listings by younger and riskier firms.