investment - results that are consistent with the model's predictions. …

We study the effect of variation in interest rates on investment spending, employing a large panel data set that links … quantitatively important effect of the user cost of capital on the firm-level investment decisions. According to our estimates, a 1 … percentage point increase in the user cost of capital implies a reduction in the rate of investment of 50 basis points and, in …

effects on Tobin’s Q, net equity issuance, and real investment, consistent with the predictions of the model …