We investigate the investment-cash flow sensitivity of a large sample of the UK listed firms and confirm that investment is strongly cash flow-sensitive.Is this suboptimal investment policy the result of agency problems when managers with high discretion overinvest, or of asymmetric information...

This paper presents some two-step estimators for a wide range of parametric panel data models with censored endogenous variables and sample selection bias. Our approach is to derive estimates of the unobserved heterogeneity responsible for the endogeneity/selection bias to include as additional...

This paper analyzes wage structures in the public and the private sector for Germany. The data contains a rich set of variables on parents' characteristics that we use as instruments. We extend the empirical literature in this field by endogenizing education level and hours worked, and by using...

This paper analyzes the portfolio structure of households in the Netherlands. It considers the allocation of financial wealth to two major asset categories, namely saving accounts on the one hand and stocks and bonds on the other hand. The latter category is considered to be more risky than the...

We analyze households' joint investment decisions for financial wealth and homes.In our bivariate censored regression model with endogenous switching, fixed costs or transaction costs are captured by a threshold that has to be passed before the purchase.The model allows for spill-over effects of...

This study investigates the effects of relationship lending on firm innovativeness using a panel of Italian manufacturing firms. In order to disentangle the impact of bank ties on the discovery phase from that in the introduction phase of new technologies, the analysis proceeds in two steps,...

This paper considers the investment decision of a firm where it has to decide about the timing and capacity. We obtain that in a fast growing market, right after investment the firm produces below capacity, where the utilization rate (the proportion of capacity that is used for production right...

This paper revisits the important result of the real options approach to investment under uncertainty, which states that increased uncertainty raises the value of waiting and thus decelerates investment.Typically in this literature projects are assumed to be perpetual.However, in today.s economy...