We examine firms' simultaneous choice of investment, debt financing and liquidity in a large sample of US corporates between 1980 and 2014. We partition the sample according to the firms' financial constraints and their needs to hedge against future shortfalls in operating income. In contrast to...

This paper contributes empirically to the ‘Excess Sensitivity' literature by arguing that results obtained by using investment-cash flow sensitivity as a metric to represent finance constraint of firms can be misleading. This is because cash flow apart from signaling change in net worth may...

We employ a Bayesian estimation technique to construct firm-varying investment-cash flow sensitivities (ICFS) for a sample of 90 Spanish listed firms over a 10-year period (1999-2008). Then we analyze which variables are associated with the firm-level ICFS-estimates both univariately and...

Treating the potential endogeneity problems of the empirical specifications in prior studies, I employ a dynamic multi-equation model in which firms make interdependent decisions in financing, investment, and distribution, under the constraint that sources and uses of cash must be equal. I argue...

The purpose of this work is to verify the existence of financial constraints for investment in Brazil, an emerging market with growing international visibility. Using panel data methodology and GMM, we estimate dynamic investment models based on the Euler equation and Tobin's q for a panel...

This paper investigates whether the Quantitative Easing (QE) program implemented by the Federal Reserve Board after the 2007-2008 global financial crisis affects firms in emerging economies by improving their access to external financing. Our hypothesis relies on the idea that the excess of...

I construct a structural model in which firms maximize value conditional on being restricted from issuing equity and unsecured debt. Using GMM estimation, I find that a model with both equity and debt constraints fits better than models without constraints or with only one constraint. The...