In the q theory approach, the firm faces convex costs of adjustment and equals the marginal valuation of a unit of … capital, with the marginal cost of investment. In the irreversible investment literature, the firm must consider future … highly liquidable assets in the company influences decisions of investment and disinvestment in productive assets and if its …

We develop and characterize analytically an investment model in discrete time with a fixed adjustment cost not … proportional to existing capital and complete irreversibility that reproduces the lumpiness of investment at the micro-level. In … agreement with the empirical evidence, as a firm size increases, investment becomes less lumpy. The optimal policy is of the …

We formulate and estimate a structural model of firm investment behavior that specifies the exact channel through which … that both real and financial frictions have an important effect on firm investment dynamics. JEL Classification: E22 …

costs firms infrequently carry out discrete investment projects. Therefore, financial variables may influence investment in … two ways. Theoretically, they can alter the frequency at which investment projects are undertaken, or they can influence … finance on investment decisions is substantial. Consequently, finance primarily affects investment frequencies and accordingly …

Using plant-level data from Chile and the U.S., we show that investment spikes are highly pro-cyclical, so much so that … changes in the number of establishments undergoing investment spikes (the “extensive margin”) account for the bulk of … variation in aggregate investment. The number of establishments undergoing investment spikes also has independent predictive …

of firm investment and demand for labor with imperfect capital markets, represented as a constraint on dividends, and … increase in firm investment, which does not happen if only labor market rigidities are removed. …