This paper develops and estimates a model of firm-level fixed capital investment when firms face borrowing constraints …. Dynamically optimal investment functions are derived for the firms with and without financial constraints. These policy functions … are then used to construct the likelihood of observing each of the investment regimes in the data. Structural parameters …

investment and growth. The increased risk from holding biased portfolios, which increases the demand for the risk-free asset …

Employment protection may affect both productivity and capital investment because higher adjustments costs hamper … to react thanks to an easier access to the credit market. Our results also indicate that the EPL reform reduced the … probability to access the credit market, possibly because stricter EPL reduces both the value of the firm and the amount of …

neoclassical growth model. Investment rates and total factor productivity start out low and rise over time. These model dynamics …

This study examines the relationship between the corporate investment and liquidity constraints of non-financial sector … of Nepalese enterprises. The study derives a theoretical investment-liquidity constraint model to test the hypothesis … that the investment decisions of more financially constrained firm will be more sensitive to their internal funds as …

This paper examines the role of uncertainty and capital market imperfection in influencing firm investment …. Introduction of uncertainty in the investment model allows for limited expandability and limited reversibility of capital over time … group. We identify financially constrained firms in various years by relying on investment-asset sale sensitivity. Using an …

This paper presents a switching regression model of investment decision where the probability of a firm facing … establishes that financially constrained firms exhibit a much higher investment-cash flow sensitivity than those identified to be …

Low investment rates are a puzzling phenomenon particularly in transition economies with an urgent need for … modernisation. The literature offers two alternative explanations: imperfect capital markets and investment reluctance due to real … real option effects may lead to erroneous conclusions in the context of empirical investment equations …