, 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 …

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 …

embodied technology, investment irreversibility, and variable capacity utilization. Low short-run capital …

version of the separation of ownership and control -- Jensen's (1986) free cash flow theory--into a dynamic equilibrium model … and study the effect of imperfect corporate control on asset prices and investment. We assume that firms are run by empire … aggregate free cash flow of the corporate sector is an important state variable in explaining asset prices and investment. We …

. Combined with precautionary savings, investment risk generates rich effects that do not arise in the presence of pure endowment …

We quantify the role of financial leverage behind the sluggish post-crisis investment performance of European firms. We … investment more after the crisis. This negative effect is stronger for firms holding short-term debt in countries with sovereign … stress, consistent with rollover risk being an important channel influencing investment. The negative effect of firm leverage …

investment; the impact of uncertainty on investment occurs primarily through changes in credit spreads; and innovations in credit … spreads have a strong effect on investment, irrespective of the level of uncertainty. These findings raise a question … financial shocks. By influencing the effective supply of credit, both types of shocks exert a powerful effect on investment and …

several shocks and frictions. In this model, shocks to the marginal efficiency of investment account for the bulk of …

We argue that positive co-movements between land prices and business investment are a driving force behind the broad … joint dynamics of land prices and business investment …

. Theory translates into an intuitive econometric system that identifies the causal impact of trade on income and growth, and …