What determines investment is a much analysed policy question all around the world. Growth and previous investments are the primary variable used to analyse current investment. But there is much difference in opinions among economists regarding which policy instrument should be emphasised more...

In this paper, we show that a reduction in capital goods prices induced by trade policies can stimulate both investment and labor. We exploit a quasi-natural experiment in the form of a trade reform in Colombia to study how firms with differential exposure to reductions in capital goods tariffs...

We examine the dynamics of corporate investment in Germany during the 2000s, a period marked by stagnant macroeconomic investment spending. Employing a mixed-methods approach, we explore investment trends across national accounts data, firm-level financials, and responses from financial...

If the relation between investment and economic growth is well established in the macroeconomic literature, the existence of a similar link at the level of the firm has been challenged by empirical work. This paper investigates the channels linking investment and firm performance in the French...

This paper investigates the changes in firm value triggered by corporate tax rate changes for which firms have balances on deferred tax allowances and deferred tax assets. The effects on both investment to fixed/current assets are well taken care of with embedded production functions and firm...

We document sizeable and surprising differences in investment behavior between stock market listed and privately held firms in the U.S. using a rich new data source on private firms. Listed firms invest substantially less and are less responsive to changes in investment opportunities compared to...

We investigate whether short-termism distorts the investment decisions of stock market listed firms. To do so, we compare the investment behavior of observably similar public and private firms using a new data source on private U.S. firms, assuming for identification that closely held private...

This short note is a response to Welch (2020), who claims that our results in Chaney, Sraer and Thesmar (2012) are not robust. We show that none of his findings invalidate our results. Welch makes three major points. First, he correctly points out that our baseline specification uses a common...

We study the differences in the allocation of cash flow between Western European private and public firms. Public firms have a significantly higher investment-cash flow sensitivity than comparable private firms. These differences in investment-cash flow sensitivities are not due to more...

In this paper we estimate the effects of financialization on physical investment in selected western European countries using panel data based on the balance-sheets of publicly listed non-financial companies (NFCs) supplied by Worldscope for the period 1995-2015. We find robust evidence of an...