This Paper examines how the investment of financially constrained firms varies with their level of internal funds. We … develop a theoretical model of optimal investment under financial constraints. Our model endogenizes the costs of external … investment is U-shaped. In particular, when a firm’s internal funds are negative and sufficiently low, a further decrease leads …

The best predictor of current investment at the firm level is lagged investment. This lagged-investment effect is … empirically more important than the cash-flow and Q effects combined. We show that the specification of investment adjustment … costs proposed by Christiano, Eichenbaum and Evans (2005) predicts the presence of a lagged-investment effect and that a …

Which investment model best fits firm-level data? To answer this question we estimate alternative models using … implication, that Q is a sufficient statistic for determining a firm's investment decision, has been often rejected because cash …-flow and lagged-investment effects are present in investment regressions. However, we find that these regression results are …

investment (FDI) are most likely to take place through contacts between MNCs and their local suppliers, our finding suggests that …

minimum wage. The paper concludes by showing that if employers can change investment in fixed capital and in training, then an …

firms significantly increase post-IPO investment in human capital compared to the pre-IPO stage. To address endogeneity … the newly public firms to access both equity and debt markets for funding investment in human capital, and not only …