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inaction caused by sunk costs. The second, the neo-institutional finance theory, emphasises capital market imperfections and … firms' released liquidity constraints. Empirical applications of the latter theory often refer to linear econometric models …
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A popular interpretation of the Rational Expectations/Efficient Markets hypothesis states that, if the hypothesis holds, then market valuations must follow a random walk. This postulate has frequently been criticized on the basis of empirical evidence. Yet the assertion itself incurs what we...
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The paper develops a model of firm's investment under uncertainty with financial market imperfections and analyzes the effects of financial constraints on firm's investment. Firm's investment is an increasing function of the firm's marginal q, however the investment function is characterized by...
Persistent link: https://www.econbiz.de/10003656108
The paper develops a model of firmś investment under uncertainty with financial market imperfections and analyzes the effects of financial constraints on firmś investment. Firmś investment is an increasing function of the firmś marginal q, however the investment function is characterized by...
Persistent link: https://www.econbiz.de/10003631493
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