investment from 1990 to 1999 through the cost-of-capital and the cash-flow channels. We compare several specifications of neo …

firms' investment ratio. Changes in user costs are significantly affected by changes in the monetary policy indicator. In … addition, firm specific balance sheet characteristics, such as the lagged cash stock to capital ratio influence the investment …, are more sensitive to user cost changes, sales growth and the lagged cash to capital ratio. …

We estimate the effect of demand and price uncertainty on firms’ investment decisions from a panel of manufacturing … investment, while price uncertainty is insignificant. This is consistent with the behavior of monopolistic firms with … irreversible capital (Caballero, 1991). Further, firms revise their investment plans very little. They may do so in response to new …

spur investment in innovation (R&D). We characterize which firms should substitute production for innovation in the face of … constraints and thus display a "gambling" type of behavior. We embed our firm dynamics into a model of endogenous growth and show … that financing frictions have offsetting effects on economic growth. …

spur investment in innovation (R&D). We characterize which firms should substitute production for innovation in the face of … constraints and thus display a "gambling" type of behavior. We embed our firm dynamics into a model of endogenous growth and show … that financing frictions have offsetting effects on economic growth …

future investment, despite market frictions hampering possible profitable growth opportunities. … investment decisions. Our findings support the hypothesis that financial flexibility relates to companies’ ability to undertake …