shareholders and managers in which managers have private benefits or private costs of investment. Managers overinvest when they … compensation, investment, and firm performance for both cases. The relationship between firm performance and managerial incentives …, in isolation, is insufficient to identify whether managers have private benefits or private costs of investment. In order …

We analyze private fixed investment in the U.S. over the past 30 years. We show that investment is weak relative to … two broad categories of explanations: theories that predict low investment because of low Q, and theories that predict low … investment despite high Q. We argue that the data does not support the first category, and we focus on the second one. We use …

We examine how credit constraints affect the cyclical behavior of productivity-enhancing investment and thereby … volatility and growth. We first develop a simple growth model where firms engage in two types of investment: a short-term one and … a long-term productivity-enhancing one. Because it takes longer to complete, long-term investment has a relatively less …

major intermediate input into expanding plant capacity, investment goods, is coutercyclical. The ratio of these prices is … expanding plant capacity by installing investment goods (`adjustment costs'). Also, its numerator and denominator have such … technology for producing investment goods. The adjustment costs cause the two prices to respond differently to these two shocks …

We document a new business cycle fact: the cross-sectional standard deviation of firm-level investment (investment … dispersion) is robustly and significantly procyclical. This makes investment dispersion different from the dispersion of … productivity and output growth, which is countercyclical. Investment dispersion is more procyclical in the goods-producing sectors …

In this paper I analyze the relationships among investment, q, and cash flow in a tractable stochastic model in which … regressions of investment on q and cash flow. In empirical studies, the estimated cash-flow coefficient is generally positive and …

The interest rate is a key determinant of firm investment. We integrate a widely used term structure model of interest … rates, CIR (Cox, Ingersoll, and Ross (1985)), with the q theory of investment (Hayashi (1982) and Abel and Eberly (1994 …)). We show that stochastic interest rates have significant effects on investment and firm value because capital is medium …

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 …