Using plant-level data from Chile and the U.S. we show that investment spikes are highly pro-cyclical, so much so that … changes in the number of establishments undergoing investment spikes (the "extensive margin") account for the bulk of … variation in aggregate investment. The number of establishments undergoing investment spikes also has independent predictive …

investment behavior from a fresh angle. We tested the martingale investment hypothesis and then the q-theory of investment by … accepted, and we also found evidence for the validity of the q-theory hypothesis. Investment was responsive to profit rate …. -- Investment revision ; martingale ; stock return ; q theory ; market share ; flexible accelerator theory …