Though most economists agree that monetary policy has significant effects on the real sector in the short run, interest-rate elasticities of macroeconomic aggregates in general are found to be low. Recently, the credit channel has been discussed as an additional channel through which monetary...

In 1867, the "Compromise" between Austria and Hungary laid the foundation of a single currency system with a common central bank. As in today's euroland, each part of the monarchy remained sovereign in fiscal matters. Moreover, the borrowing needs of both parts of the monarchy were quite large,...

Using individual firm data, this study analyzes the credit channel in Austria. The estimation is based on an accelerator specification of investment demand augmented by the liquidity ratio and a firm specific user cost of capital. The results show that there is a credit channel in Austria...

We use the stochastic frontier approach to estimate the impact of firm characteristics on investment decisions of Indian firms during the 1997-2006 period. The use of the stochastic frontier approach allows us to define the (unobserved) optimum investment that is consistent with a firm's...

In this paper the corporate investment decision under financial restrictions is investigated with Belgian firm data from 1984 to 1992. An investment Euler equation is derived from a dynamic optimization model with debt ceilings and an elastic credit supply. The model is estimated by GMM for...

Many recent studies have pointed out that firms with cash stocks or strong cash flow are financially resilient, enabling them to continue to invest and grow even when they experience economic shocks. In this paper we ask whether Asian firms were resilient to the recent financial crisis. Using...

This paper studies the impact that pre-IPO cash flow volatility has on the initial and long-term value of a publicly traded firm. From the perspective of corporate risk management theory, higher cash flow volatility should reduce value in the form of higher borrowing costs, reduced investment,...

We study managers' self-assessment of their firm's financial constraint status to assess the validity of commonly used indicators of financial constraints. As categorizations based on common financial constraints measures lead to high misclassifications, we derive a new measure of financial...

Previous studies argued that low investment-cash flow sensitivities of German firms may be caused by dominance of public banking. The paper addresses this topic and applies a unique accounting dataset of German firms. Results from a dynamic panel data approach show that the dependence of...

We examine a large and unique panel containing survey and financial statement data on small and medium sized private enterprises (SMEs) in Germany from 1991 to 2011. From the survey data, we derive a financial constraints measure based on managers' self-perception. We find that our measure...