One outcome of the existence of social capital in a community is that individuals will take into consideration the welfare of other members of the community. If an investment project is undertaken that causes the poorer members of society to increase their consumption of goods and services to...

This paper uses a large panel of Pakistani non-financial firms over the period 2000-2013 to examine the role of financial constraints in establishing the relationship between cash flow and external financing. The results reveal that there exists a negative and significant relationship between...

This work makes a comparative analysis of the evaluation of an investment project, considering two approaches, one with cash flows at constant prices and the other at current prices. The goal is to determine which of these two approaches is best for project evaluation to make the right...

This paper uses a large panel of Pakistani non-financial firms over the period 2000–2013 to examine the role of financial constraints in establishing the relationship between cash flow and external financing. The results reveal that there exists a negative and significant relationship between...

Private information imposes a severe trading disadvantage on uninformed traders while at the same time providing firms 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...

We investigate the cost of capital in a model with an agency conflict between inside managers and outside shareholders. Inside ownership reflects the classic tradeoff between incentives and risk diversification, and the severity of agency costs depends on a parameter representing investor...

In this paper, we use an exogenous variation in tax regulations to analyze the impact of bonus depreciation programs on business investment. To promote economic convergence of Eastern and Western Germany after reunification, bonus depreciation tax incentives were granted for investments in...

This paper analyzes whether the financial distress of a firm affects the investment decisions of non-distressed competitors. On average, firms in distress impose indirect costs to non-distressed competitors by increasing costs of credit in the industry and hence restricting credit access and...

We investigate the cost of capital in a model with an agency conflict between inside managers and outside shareholders. Inside ownership reflects the classic tradeoff between incentives and risk diversification, and the severity of agency costs depends on a parameter representing investor...

We exploit the adoption of U.S. state-level labor protection laws to study the effect of employment protection on corporate investment and growth. We find that, following the adoption of these laws, capital expenditures decrease, resulting in firms growing sales at a slower rate. Our findings...