This paper examines the heterogeneity of capital stocks using financial statement data of publicly listed Japanese firms. We conduct factor analysis on investment rates among various capital goods and estimate factor loadings of each as its reactions to common factors like total factor...

We propose a theory to manage the uneasy relation between strategic choice, chance, and determinism (or inevitability). To do so, we locate arguments in intellectual history that have a clear bearing on this relation. We introduce and defend four conjectures that outline the relationship between...

Experience suggests that strategy entails some interplay of choice, chance, and determinism as causal elements. Specifically, strategy is predicated on causality, or the principle that strategic choices have causes as well as consequences. Yet our discipline lacks a fundamental theory of...

This paper analyzes the behavior of a firm that chooses both the scale and timing of its investment. Sensitivity analysis shows that greater demand volatility is associated with the firm investing in larger increments, less frequently. This is in contrast to the conventional wisdom, which is...

In this paper the cyclical behaviour of markups in presence of imperfect capital markets has been analysed from an empirical point of view. A markup equation has been estimated including among regressors a leverage variable. This approach is based on the hypothesis that more leveraged firms have...

A dynamic directional input distance function is proposed within the adjustment-cost model of the firm, generalizing the directional distance function developed by Chambers, Chung and Färe (1996) in the static context. Duality is established between the dynamic directional distance function and...

Typically, firms change their size through a row of discrete leaps over time. A very basic model allowing for discontinuous growth can be based on a couple of assumptions: (a) in the short run, the firm’s equipment and organization provide the maximum profit only for a given production level,...

We partnered with a micro-lender in Mali to randomize credit offers at the village level. Then, in no-loan control villages, we gave cash grants to randomly selected households. These grants led to higher agricultural investments and profits, thus showing that liquidity constraints bind with...