Purpose: In this paper, the authors study the long-run determinants of total factor productivity (TFP) in three major European economies over the period 1983–2017, namely Germany, France and Italy. Design/methodology/approach: The authors focus on the capital misallocation effects, scale...

In this paper we build up a theoretical continuous time model to study how future constraints affect current investment decisions. We show that firms constrained in the future, but currently unconstrained, select an optimizing investment trajectory different from that of an identical firm that...