exist in certain markets. This proposition is put to the test by examining every equity investment made by one of the … sufficient investment capital …

We study the response of corporate investment in Emerging Markets to unexpected fiscal shocks. We find that, although … firm-level investment decreases on impact following unexpected public expenditure adjustments (classical Keynesian … multiplier effect), it quickly rises above pre-shock levels. The rebound in investment is facilitated by fiscal space, flexible …

In emerging markets, unexpected public expenditure reductions increase firm-level investment, which quickly surpasses … pre-shock levels after a temporary contraction, owing to a decline in financing costs. Investment’s recovery is …: reductions in public consumption (vis-a-vis public investment) yield larger private investment contractions on impact but result …