This paper develops and estimates a model of firm-level fixed capital investment when firms face borrowing constraints …. Dynamically optimal investment functions are derived for the firms with and without financial constraints. These policy functions … are then used to construct the likelihood of observing each of the investment regimes in the data. Structural parameters …

material to the economy's investment prospects and whether the importance of this channel differs depending on the structure of … corporate financing i.e., bank-based or market-oriented financing structures. Based on a dynamic business investment error … financial position of non-financial corporations has a statistically significant impact on aggregate business investment growth …

possible shifts in global savings and investment that have led to this fall in the world real interest rate. There are several … key findings. First, the authors identify the relative weakness in investment demand as more important than the relative … factors explaining movements in savings and investment are variables that evolve relatively slowly over time, such as labour …

This paper takes a full-information model-based approach to evaluate the link between investment-specific technology … and the inverse of the relative price of investment. The two-sector model presented includes monopolistic competition … the high-frequency volatility of the relative price of investment. Utilizing a Bayesian estimation approach to match the …

This paper identifies the aggregate financial shocks and quantifies their effects on business investment based on an ….S. public firms' aggregate investment. The negligible aggregate relevance of financial shocks mainly results from the …, financially constrained firms are directly forced to cut investment, which dampens the aggregate investment demand and lowers the …