Detail Optimal investment under finance constraints and uncertainty Bibliografi Author: Mithal, Reena Varma ; Hubbard, Robert Glenn (Advisor) Topik: ECONOMICS; FINANCE Bahasa: (EN )    ISBN: 0-591-32634-5     Penerbit: Columbia University     Tahun Terbit: 1997     Jenis: Theses - Dissertation Fulltext: 9723829.pdf (0.0B; 3 download) Abstract An extensive literature on the firm's optimal investment decision provides evidence that firms do not invest in accordance with the optimality conditions of the baseline neoclassical model of investment. Although firms maximize profits subject to a constraint on capital accumulation, the traditional model is only valid when capital markets function perfectly and when future economic conditions are known with certainty so that foreseeable shocks can be incorporated into cash flow projections. We explore the hypothesis that firms facing finance constraints are also likely to face liquidity constraints on investment due to the incentive to divert funds into liquid assets as safeguards against future shortfalls in external finance. The model is tested on panel data sets of U.S., U.K., German and Japanese firms. Investment behavior by U.S., U.K. and Japanese firms indicate the existence of liquidity constraints. Further, we integrate the impact of uncertainty and capital market imperfections on optimal investment, which have so far been investigated independently of each other. We incorporate finance constraints into a model of investment under uncertainty by the introduction of a variable discount rate that is dependent on the firm's credit quality. The optimization problem produces a threshold policy where the combined impact of finance constraints and uncertainty is identified in the wedge between the marginal value and cost of investment. Heterogeneity across firms is depicted via the use of various discount rate functions which illustrate movements in the threshold policy as a function of the firm's installed capital stock. The model presents interesting opportunities for further research on the interaction between uncertainty and capital market imperfections, and their impact on investment. Opini Anda Klik untuk menuliskan opini Anda tentang koleksi ini! Lihat Sejarah Pengadaan  Konversi Metadata   Kembali

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