This paper tests the opportunity-cost theory using a panel of Spanish firms during the period 1991-2010. Under this theory, productivity-enhancing activities, such as R&D investment, should increase during downturns because of the fall in their relative cost – in terms of forgone output –....

Purpose – This paper aims to study the formation and amplification mechanism of the financial crisis and business cycle and also discuss the related optimal rules for the central bank and government. Design/methodology/approach – This study is developed basically on a simple financial...

The paper studies empirically how relative supply and demand conditions on the capital market affected US firm-level investment over the business cycles from 1977 to 2011. A dynamic econometric specification of capital accumulation including sales growth, Tobin's q, the cash flow-capital ratio...

We use a French firm-level panel data set over the period 1993-2004 to analyze the relationship between credit constraints and firms' R&D behavior over the business cycle. Our main results can be summarized as follows: (i) the share of R&D investment over total investment is countercyclical...

Purpose–This paper aims to study the formation and amplification mechanism of the financial crisis and business cycle and also discuss the related optimal rules for the central bank and government. Design/methodology/approach–This study is developed basically on a simple financial business...

This paper uses a dataset from one of the largest credit card issuers in Brazil to investigate the extent of credit constraints for one of the world's largest emerging market economies. In order to deal with the endogeneity problem from an observational dataset, an identification strategy based...

Many countries offer state credit guarantees to support credit-constrained exporters. The policy instrument is commonly justified by governments as a means to mitigating adverse outcomes of financial market frictions for exporting firms. Accumulated returns to the German state credit guarantee...

We use a comprehensive Swedish credit register to document that firms throughout the size distribution have access to fairly large and reasonably priced credit lines, but borrow relatively little from them. We rationalize this using a theoretical framework in which the expected cost of financial...