In this paper we describe a theoretical model of optimal investment of various types of financially constrained firms …. We show that the resulting relationship between internal funds and investment is non-monotonic. In particular, the … magnitude of the cash flow sensitivity of the investment is lower for firms with credit rationing compared to firms that are …

The paper studies the interaction between cyclical uncertainty and investment in a stochastic real option framework … of the link between cyclical uncertainty and investment is quantified using simulations of the model. The chief … shows that macroeconomic risk acts as an important deterrent to investments. -- business cycles ; real options ; investment …

The paper studies the interaction between cyclical uncertainty and investment in a stochastic real option framework … of the link between cyclical uncertainty and investment is quantified using simulations of the model. The chief …

(SMM) for the estimation of structural models with fixed parameter heterogeneity. The main advantage of the procedure is … of the SMM criterion function. We illustrate the use of our method by estimating a neoclassical model of investment for a …