, which enables increased leverage and investment. In the absence of frictions in the securitization process, we show that the … be constrained inefficient due to the existence of a pecuniary externality that can result in over or under-investment …. We examine policies to correct over-investment and find that a leverage ratio restriction generates a Pareto improvement …

show that product and labor market regulations negatively affect firm investment by lowering firm profitability. The … firms’ investment by using a panel data of European firms over the period 1994-2008. It studies the impact of product and … labor market regulations on firm investment and how it changes with the degree of financial market imperfections. Findings …