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We examine firms' simultaneous choice of investment, debt financing and liquidity in a large sample of US corporates … affect the corporate decisions of unconstrained firms more strongly than those of constrained firms. Investment-cash flow … sensitivities are particularly intense for unconstrained firms with high hedging needs. Investment opportunities (as proxied by Q …
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investment), (3) that the specific causes of the IS imbalances have changed dramatically over time, and (4) that future trends in …
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financially turbulent periods in the 2000s in making investment decisions and in meeting demand for liquidity. A rise in … uncertainty regarding the ability to obtain external funds may have induced firms to rely on internal funds to finance investment … activities. Therefore, we shed light on the cash flow sensitivity of investment and cash holdings by estimating firm- level …
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Martin Stuart ("Marty") Feldstein, currently George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, Inc. (NBER), is a renowned American economist who has made important contributions to public finance, macroeconomics,...
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