that, on the investment in risky projects, welfare and growth. We find that the welfare gain of financial market openness …

, consumption/savings, and portfolio selection. For a lump-sum investment payoff and an agent with a sufficiently strong … precautionary savings motive, an increase in volatility can accelerate investment, contrary to the standard real options analysis …. When the agent can trade the market portfolio to partially hedge against investment risk, the systematic volatility is …

We study a model of lumpy investment wherein establishments face persistent shocks to common and plant …-specific productivity, and nonconvex adjustment costs lead them to pursue generalized (S,s) investment rules. We allow persistent … the first model consistent with available evidence on establishment-level investment rates. Examining the implications of …

This paper examines distortions in corporate investment decisions when a new project changes firm risk. It presents a … dynamic model in which a self-interested, risk-averse manager makes investment decisions at a levered firm. The model …, calibrated using data from public firms, is used to estimate the magnitude of distortions in investment decisions. Despite …

In the presence of lumpy investment cost of adjustment, globalization may have non-conventional effects on the level of … investment and its cyclical behavior. Trade openness may lead to a discrete 'jump' in the level of investment, as it may trigger … a discrete change in the terms of trade. Such a shift creates a sizeable boost in aggregate investment. But trade …

chosen to reproduce the nonlinear relationship between investment and profitability that we uncover in the plant-level data …

This paper estimates the micro-level costs of adjusting capital using detailed data on" investment decisions in the US … clear evidence of non-convex adjustment costs inaction for capital investment and quadratic adjustment costs conditional on … positive or negative" investment. The adjustment costs for utilization show similar non-convexities but with smaller …

This paper proposes a simple homogeneous dynamic model of investment and corporate risk management for a financially … investment and financing decisions. In our model, corporate risk management involves internal liquidity management, financial … hedging, and investment. We determine a firm's optimal cash, investment, asset sales, credit line, external equity finance …

We examine the extent to which uncertainty delays investment and the effect of competition on this relationship using a … increase in the return volatility reduces the probability of investment by 13 percent, equivalent to a 9 percent decline in …