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with valuable signals for investment adjustment. The two forces have opposite impacts on the cost of capital, and the net … effect depends on which force dominates. We show that stocks of firms with low flexibility in investment adjustment ("value … firms") command an information premium, whereas stocks of firms with high flexibility in investment adjustment ("growth …
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Empirical studies have uncovered an inverted-U relationship between product-market competition and innovation. This is inconsistent with the original Schumpeterian Model, where greater competition reduces the profitability of innovation. We show that the model can predict the inverted-U if the...
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logarithmic over consumption. Human capital investment is risky due to idiosyncratic shocks that follow a Markov process with … human capital investment in the market economy. …
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logarithmic over consumption. Human capital investment is risky due to idiosyncratic shocks that follow a Markov process with … human capital investment in the market economy …
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