Author: Andrea CaggesePublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Testing Financing Constraints on Firm Investment Using Variable Capital
Global Capital Flows and Financing Constraints
Author: Ann E. HarrisonPublisher: World Bank Publications
ISBN:
Category : Capital movements
Languages : en
Pages : 54
Book Description
Firms often cite financing constraints as one of their primary obstacles to investment. Global capital flows, by bringing in scarce capital, may ease host-country firms' financing constraints. However, if incoming foreign investors borrow heavily from domestic basnks, direct foreign investment (DFI) may exacerbate financing constraints by crowding host country firms out of domestic capital markets. Combininb a unique cross-country firm-level panel with time-series data on restrictions on international transactions and capital flows, we find that different measures of global flows are associated with a reduction in firm-level financing constraints. First, we show that one type of capital inflow--DFI--is associated with a reduction in financing constraints. Second, we test whether restrictions on international transactions affect firms' financing constraints. Our results suggest that only one type of restriction--those on capital account transactions--negatively affect firms' financing constraints. We also show that multinational firms are not financially constrained and do not appear to be sensitive to the level of DFI. This implies that DFI eases financing constraints for non-multinational firms. Finally, we show that DFI only eases financing constraints in the non-G7 countries.
Firms' Investment and Finance Decisions
Author: Paul ButzenPublisher: Edward Elgar Publishing
ISBN: 9781781956335
Category : Business & Economics
Languages : en
Pages : 354
Book Description
This book provides coherent theoretical and empirical analysis of firms’ investment and financing decisions. It assesses the role of uncertainty, financial imperfections, corporate governance and taxation. Evidence is obtained using several unique and high quality microeconomic data-sets, which explore features seldom addressed.
Financing Constraints and Fixed Investment
Author: Philip VermeulenFinancial Constraints, Uses of Funds and Firm Growth: and International Comparison
Author: Vojislav Maksimovi?, Asl? Demirgüç-KuntPublisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 54
Book Description
October 1996 The findings suggest that across very different financial systems, financial markets and intermediaries have a comparative advantage in funding short-term investment. An active, though not necessarily large, stock market and high scores on an index of respect for legal norms are associated with faster than predicted rates of firm growth. Government subsidies to industry do not increase the proportion of firms growing faster than predicted. Demirgüç-Kunt and Maksimovic focus on two issues. First, they examine whether firms in different countries finance long-term and short-term investment similarly. Second, they investigate whether differences in financial systems and legal institutions across countries are reflected in the ability of firms to grow faster than they might have by relying on their internal resources or short-term borrowing. Across their sample, they find: * Positive correlations between investment in plant and equipment and retained earnings. * Negative correlations between investment in plant and equipment and external financing. * Negative correlations between investment in short-term assets and retained earnings. * Positive correlations between investment in short-term assets and external financing. These findings suggest that across very different financial systems, financial markets and intermediaries have a comparative advantage in funding short-term investment. For each firm in their sample, they estimate a predicted rate at which it can grow if it does not rely on long-term external financing. They show that the proportion of firms that grow faster than the predicted rate in each country is associated with specific features of the legal system, financial markets, and institutions. An active, though not necessarily large, stock market and high scores on an index of respect for legal norms are associated with faster than predicted rates of firm growth. They present evidence that the law-and-order index measures the ability of creditors and debtors to enter into long-term contracts. Government subsidies to industry do not increase the proportion of firms growing faster than predicted. This paper - a product of the Finance and Private Sector Development Division, Policy Research Department - is part of a larger effort in the department to understand the impact of financial constraints on firm growth.
Investment, Acquisitions, and Financial Constraints
Author: Joshua Robert PiercePublisher:
ISBN:
Category : Advertising
Languages : en
Pages : 296
Book Description
Investment Smoothing with Working Capital
Author: Steven M. FazzariPublisher:
ISBN:
Category : Capital market
Languages : en
Pages : 56
Book Description
Credit Constraints and Investment in Latin America
Author: Arturo J. GalindoPublisher: IDB
ISBN: 9781931003599
Category : Business & Economics
Languages : en
Pages : 324
Book Description
One Cost of the Chilean Capital Controls
Author: Kristin ForbesPublisher:
ISBN:
Category : Corporations
Languages : en
Pages : 68
Book Description
There is growing support for taxes on short-term capital inflows in emerging markets, such as the encaje adopted by Chile from 1991-98. Previous empirical assessments of the encaje conclude that it may have generated some small economic benefits, such as shifting the composition of capital inflows to a longer maturity, but no significant economic costs. Managers of small and medium-sized companies in Chile, however, claim that the encaje made it substantially more difficult to obtain financing for productive investment. This paper assesses whether the Chilean capital controls increased financial constraints for different-sized, publicly traded firms. It uses two different testing methodologies: a Tobin's-q and Euler-equation framework. Results indicate that during the encaje, smaller traded firms in Chile experienced significant financial constraints and these constraints decreased as firm size increased. Both before and after the encaje, however, no group of traded firms experienced significant financial constraints, and there is no relationship between firm size and financial constraints. Although Chilean-style capital controls may also have significant benefits, this cost of the encaje could be particularly important in emerging markets where smaller firms are valuable sources of job creation and economic growth. Keywords: Capital Controls, Encaje, Chile, Firm-financing Constraints. JEL Classifications: F3, F21, G1, G32, O16, O54.
An Introduction to Modern Econometrics Using Stata
Author: Christopher F. BaumPublisher: Stata Press
ISBN: 1597180130
Category : Business & Economics
Languages : en
Pages : 362
Book Description
Integrating a contemporary approach to econometrics with the powerful computational tools offered by Stata, this introduction illustrates how to apply econometric theories used in modern empirical research using Stata. The author emphasizes the role of method-of-moments estimators, hypothesis testing, and specification analysis and provides practical examples that show how to apply the theories to real data sets. The book first builds familiarity with the basic skills needed to work with econometric data in Stata before delving into the core topics, which range from the multiple linear regression model to instrumental-variables estimation.