Real versus financial frictions to capital investment

We formulate and estimate a structural model of firm investment behavior that specifies the exact channel through which financial frictions bite. The model also allows for the existence of both convex and non-convex costs to adjusting capital. Essentially, we move beyond simply testing and rejecting a neoclassical model without frictions. Our quantitative estimates show that both real and financial frictions have an important effect on firm investment dynamics.

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Year of publication:	2005
Authors:	Bayraktar, Nihal ; Sakellaris, Plutarchos ; Vermeulen, Philip
Publisher:	Frankfurt a. M. : European Central Bank (ECB)
Subject:	Investitionsentscheidung \| Unternehmensfinanzierung \| Rentabilität \| Schock \| Theorie \| adjustment costs \| financing constraints \| Investment

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Series:	ECB Working Paper ; 566
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	505092956 [GVK] hdl:10419/153000 [Handle] RePEc:ecb:ecbwps:20050566 [RePEc]
Classification:	E22 - Capital; Investment (including Inventories); Capacity
Source:	EconStor

Persistent link: https://www.econbiz.de/10011604612