Financial innovations that change how promises are collateralized can affect investment, even in the absence of any … change in fundamentals. In C-models, the ability to leverage an asset always generates over-investment compared to Arrow … Debreu. The introduction of CDS always leads to under-investment with respect to Arrow Debreu, and in some cases even …

We show that financial innovations that change the collateral capacity of assets in the economy can affect investment … an asset by selling non-contingent promises can generate over-investment compared to the Arrow-Debreu level. Second, we … show that the introduction of naked CDS can generate under-investment with respect to the Arrow-Debreu level. Finally, we …

This paper explores how financial constraints affect intangible investment for knowledge intensive and less capital … the firm to hire highly educated employees. In economics investment is defined as the act of incurring an immediate cost …

cash flow-investment sensitivities, mostly applied to manufacturing firms, to a less capital intensive part of the economy …. Therefore the knowledge intensive consulting sector is investigated but instead of analyzing the investment in plant and … machinery this analysis regards the investment in skilled employees. The argument of Kaplan & Zingales (1997) regarding low cash …