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 …

This essay surveys the body of research that asks how the efficiency of corporate investment is influenced by problems … that the marginal return to investment in firm i is the same as the marginal return to investment in firm j? Second, do … capital budgeting process get within-firm allocations right, so that the marginal return to investment in firm i's division A …

' capital investment decisions. The efficiency of stock prices is determined by the weight firms attach to private information … and by the extent to which investment is predictable. Both factors attract informed trading and lead to more revealing …