A change in the tax law that increases investment incentives for new assets may result in excess returns on new … investment, causing firm value to increase. Alternatively, because the investment incentives apply only to new investments, the … that in general investment incentives have a theoretically ambiguous effect on firm value. Models proposed by Abel (1982 …

The taxation of corporate assets is well understood to influence investment and firm valuation. This paper explores the … incentives than those implied by the usual static analysis. Simulation results suggest that investment is sensitive to future tax …

A model of capacity choice and utilization is developedconsistent with value maximization when investment is … irreversibleand future demand is uncertain. Investment requires the fullvalue of a marginal unit of capacity to be at least as large … opportunitycost of exercising the investment option. We show that formoderate amounts of uncertainty, the firm's optimal capacity …

unanticipated) changes in the distribution of political power and in economic structure. We focus on the Markov Voting Equilibria …, which require that economic and political changes should take place if there exists a subset of players with the power to … institutions as well as individual types can be ordered, and preferences and the distribution of political power satisfy natural …

This paper revisits the association between investment and growth. The empirical findings highlight substantial … heterogeneity for the effect of investment on growth and suggest a possible negative association. Results based on a battery of … cross-sectional and time-series regressions show that the link between investment and growth has weakened over time and that …

-makers not to invest in adaptation measures until after it is too late. In an interdependent world with no intervention by the …

politico-economic environment, reduces investment. As a consequence, income inequality and investment are inversely related …. Since investment is a primary engine of growth, this paper identifies a channel for an inverse relationship between income … are investment and an index of socio-political instability. Our results are robust to sensitivity analysis on the …

This paper extends previous research on the effect of investment on labor productivity at the country level by … accounting for investment in R&D, as well as for investment in fixed and human capital. Privately-funded R&D investment is found … social (national) rate of return to private R&D investment is about seven times as large as the return to investment in …

Using data from the United Nations Comparison Project and the Penn World Table, we find that machinery and equipment … investment has a strong association with growth: over l9&)?l95 each percent of GDP invested in equipment is associated with an … any of the other components of investment. A variety of considerations suggest that this association is causal, that …