Focusing on a panel of unlisted firms from transition economies, we observe that only firms facing low irreversibility … exhibit high and significant investment-cash flow sensitivities. Our findings provide a new explanation for why some …

investment behavior. New theories, better econometric procedures, and more detailed panel data sets are behind this movement … general equilibrium aspects of the investment problem also has been significant. The concept of sunk costs is at the center of … modern theories. The implications of these costs for investment go well beyond the neoclassical response to the irreversible …

corporate taxes on productivity and investment. Applying a differences-in-differences estimation strategy which exploits … investment analysis, the results suggest that corporate taxes reduce investment through an increase in the user cost of capital …

Theoretical models of investment under uncertainty predict that the sign and the strength of the investment …-uncertainty relationship is in principle ambiguous and can vary greatly across groups of firms depending on the degree of irreversibility of … investment and the market power of the firm. This paper investigates the effects of uncertainty on the investment decisions of a …

proportional to existing capital and complete irreversibility that reproduces the lumpiness of investment at the micro-level. In …We develop and characterize analytically an investment model in discrete time with a fixed adjustment cost not … agreement with the empirical evidence, as a firm size increases, investment becomes less lumpy. The optimal policy is of the …

This paper examines the effect of irreversibility on investment under mean reversion. We develop a continuous …. The recovery rate of the fixed investment cost inversely gauges the degree of irreversibility of investment. Using a real …. We show that greater irreversibility of investment induces the firm to raise its investment trigger, thereby deferring …