Author: Catherine FussPublisher:
ISBN:
Category :
Languages : en
Pages : 35
Book Description
The Response of Firms' Investment and Financing to Adverse Cash Flow Shocks
Author: Catherine FussThe Response of Firms'investment Anf Financing to Adverse Cash Flow Shocks
Author: Catherine FussFinancial Development and Dynamic Investment Behavior
Author: Inessa LovePublisher: World Bank Publications
ISBN:
Category : Business enterprises
Languages : en
Pages : 40
Book Description
Can Government Demand Stimulate Private Investment? Evidence from U.S. Federal Procurement
Author: Shafik HebousPublisher: International Monetary Fund
ISBN: 1513578723
Category : Business & Economics
Languages : en
Pages : 33
Book Description
We study the effects of federal purchases on firms’ investment using a novel panel dataset that combines federal procurement contracts in the United States with key financial firm-level information. We find that 1 dollar of federal spending increases firms’ capital investment by 7 to 11 cents. The average effect masks heterogeneity: Effects are stronger for firms that face financing constraints and they are close to 0 for unconstrained firms. In line with the financial accelerator model, our findings indicate that the effect of government purchases works through easing firms’ access to external borrowing. Furthermore, industry-level analysis suggests that that the increase in investment at the firm level translates into an industry-wide effect without crowding-out capital investment of other firms in the same industry.
The Effect of Bank Shocks on Firm-level and Aggregate Investment
Author: Publisher:
ISBN: 9789289921626
Category :
Languages : en
Pages : 42
Book Description
We show that credit supply shocks have a strong impact on firm-level as well as aggregate investment by applying the methodology developed by Amiti and Weinstein (2013) to a rich dataset of matched bank-firm loans in the Portuguese economy for the period 2005 to 2013. We argue that their decomposition framework can also be used in the presence of small firms with only one banking relationship as long as they account for only a small share of the total loan volume of their banks. The growth rate of individual loans in our dataset is decomposed into bank, firm, industry and common shocks. Adverse bank shocks are found to impair firm-level investment in all firms in our sample, but in particular for small firms and those with no access to alternative financing sources. For the economy as a whole, granular shocks in the banking system account for around 20-40% of aggregate investment dynamics.
Investment-cash Flow Sensitivities are Not Valid Measures of Financing Constraints
Author: Steven N. KaplanPublisher:
ISBN:
Category : Cash flow
Languages : en
Pages : 24
Book Description
Kaplan and Zingales [1997] provide both theoretical arguments and empirical evidence that investment-cash flow sensitivities are not good indicators of financing constraints. Fazzari, Hubbard and Petersen [1999] criticize those findings. In this note, we explain how the Fazzari et al. [1999] criticisms are either very supportive of the claims in Kaplan and Zingales [1997] or incorrect. We conclude with a discussion of unanswered questions.
The Effect of Bank Shocks on Firm-level and Aggregate Investment
Author: João AmadorPublisher:
ISBN: 9783957292667
Category :
Languages : en
Pages :
Book Description
Financing Investment in Innovation
Author: Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This dissertation studies the financing of firm innovation in the United States. Treating the potential endogeneity problems of the empirical specifications in prior studies, Chapter 1 employs a dynamic multi-equation model in which firms make interdependent decisions in financing, investment, and distribution, under the constraint that sources and uses of cash must be equal. I argue that the large R&D-cash flow sensitivities found in prior studies are mostly due to the lack of controlling for the interdependence and intertemporal nature of firm policies. My results show little support for prior arguments regarding firm financing constraints based solely on large cash flow effects on R&D. I argue that, instead of focusing on R&D-cash flow sensitivities alone, it is more appropriate to study financing constraints by investigating the asymmetry in firm responses to positive and negative cash flow shocks. Using this approach, my findings indicate that young high-tech firms are constrained, based on their significantly lower capability to absorb negative cash flow shocks than to accommodate positive ones. In addition, I find young and mature firms rely on different financing sources for innovation: young firms finance innovation through internal and external equity, while mature firms use cash flow and debt for R&D financing. R&D and physical capital investment are likely to be complementary for mature, but not for young, firms. Estimating a dynamic model of investment and capital structure in the sector of innovating firms, Chapter 2 quantifies the potential economic benefits that would be achieved by enhancing knowledge asset pledgeability to provide R&D-intensive firms with less costly debt financing. My results indicate that a small increase in the pledgeability of knowledge assets already suffices to significantly alleviate firms' financing constraints in R&D, potentially offering substantial economic benefits to innovating firms and a profound boost to technological innovation. Suggesting an essential connection between finance, innovation, and the economy, my findings have timely implications for financial, economic, and accounting issues regarding the recognition and treatment of firm knowledge assets.
International Convergence of Capital Measurement and Capital Standards
Author: Publisher: Lulu.com
ISBN: 9291316695
Category : Bank capital
Languages : en
Pages : 294
Book Description
The Economics of Corporate Governance and Mergers
Author: K. GuglerPublisher: Edward Elgar Publishing
ISBN: 1848443927
Category : Business & Economics
Languages : en
Pages : 373
Book Description
This book provides an insightful view of major issues in the economics of corporate governance (CG) and mergers. It presents a systematic update on the developments in the two fields during the last decade, as well as highlighting the neglected topics in CG research, such as the role of boards, CG and public interest and the relation of CG to mergers. Two important conclusions can be drawn from this book: the first is that corporate governance systems that better align shareholders and managers interests lead to better corporate performance; second, there is an important relationship between CG structures and the quality of firm decision-making, one of the most important being the decision to merge or take over another firm. Focusing on some of the often-neglected aspects of corporate governance such as non-profit organizations and public interest, as well as mergers and acquisitions from a CG perspective, this book will be a valuable resource for both academics and postgraduate students of finance, business and economics.