firms in making their investment decisions. We use a revealed preference approach that relies on the pattern of investment … spending - combined with investment theory - to estimate the discount rates used by managers. The standard story predicts that … firms with high stock prices and good investment opportunities should have discount rates that do not differ systematically …

The interpretation of the significant relation between business investment spending and cash flow has been … controversial. A large body of research has found that investment/cash flow sensitivities are higher for financially constrained … with the Kaplan and Zingales critique, investment/cash flow sensitivities are lower for financially constrained firms. This …

This paper proposes a new framework for studying the effects of monetary policy on business investment. Important … ambiguities with the modeling of investment dynamics and interactions between real and financial decisions suggest modeling … investment spending as a VAR. Based on a panel of financial statement data for 6,408 German firms (44,345 datapoints …

The transmission channels through which monetary policy affects business investment remain opaque. This paper examines … the importance of the interest rate and credit channels on business fixed investment in Germany. We have at our disposal …

This paper investigates whether investment spending of firms is sensitive to the availability of internal funds …. Imperfect capital markets create a hierarchy for the different sources of funds such that investment and financial decisions are … not independent. The relation between corporate investment and free cash flow is investigated using the Bond and Meghir …