We show that there is a negative relation between leverage and future growth at the firm level and, for diversified … firms, at the segment level. Further, this negative relation between leverage and growth holds for firms with low Tobin's q …, but not for high-q firms or firms in high-q industries. Therefore, leverage does not reduce growth for firms known to have …

efficient initial unobservable investment. If no learning about this investment occurs, an extreme "lemons problem" develops, no … invest. If the market operates with spot prices, simple regulation can enhance the role of reputation to induce investment …

. These comovements generate large credit risk premia for investment grade firms, which helps address the "credit spread … puzzle" and "under-leverage puzzle" in a unified framework. The model generates interesting dynamics for financing and …

competition increases, such firms will: (1) increase R&D investment relative to investment in assets-in-place that support …

This paper considers a firm that must issue common stock to raise cash to undertake a valuable investment opportunity … refuse to issue stock, and therefore may pass up valuable investment opportunities.The model suggests explanations for …

We examine the performance attributes of a merchant transmission investment framework that relies on market driven …' transmission investment to provide the infrastructure to support competitive wholesale markets for electricity. Under a stringent … set of assumptions, the merchant investment model has a remarkable set of attributes that appear to solve the natural …

This paper models investment/entry decisions in a competitive industry that is subject to a quantity control on an … that liberalizing the quantity control could reduce investment in the industry under certain circumstances. Furthermore …, the level of investment is quite different when licenses are tradable than when they are not. Key factors in the …

The empirical literature that seeks to measure the effective tax rate on new investment offers a striking paradox. On … the one hand, summary measures of the effective tax rate on new investment are normally quite high. On the other hand, the … tax rate on new investment. It is much more robust than the standard measures, such as King-Fullerton marginal effective …

In this article we develop a model to analyze patent-protected R&D investment projects when there is (imperfect …. These benefits to society are countered by increased total investment costs in R&D and lower aggregate value of the R …&D investment projects …