Internal Funds and the Investment Function PDF Download
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Author: Guy V. G. Stevens
Publisher:
ISBN:
Category : Capital investments
Languages : en
Pages : 44
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Book Description
Author: Guy V. G. Stevens
Publisher:
ISBN:
Category : Capital investments
Languages : en
Pages : 44
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Book Description
Author: Guy V. G. Stevens
Publisher:
ISBN:
Category : Capital investments
Languages : en
Pages : 36
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Book Description
Author: Erik Beecroft
Publisher:
ISBN:
Category : Corporations
Languages : en
Pages : 201
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Book Description
Author: Jason G. Cummins
Publisher:
ISBN:
Category : Cash flow
Languages : en
Pages : 62
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Book Description
Author: Mr.Omotunde E. G. Johnson
Publisher: International Monetary Fund
ISBN: 1451939167
Category : Business & Economics
Languages : en
Pages : 31
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Book Description
Firms in developing countries that seek outside financing for investment must often choose their debt-equity combinations in the face of financial market constraints on debt service, on outside equity financing, and on internal finance (endowments). Inefficiencies in the allocation of available finance and in the equity-debt choices that can ensue can be prevented by appropriate policy measures to improve information on profitable investment opportunities and about firms; to directly strengthen financial intermediation; and to support appropriate credit guarantee schemes.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
Author: Robert E. Carpenter
Publisher:
ISBN:
Category :
Languages : en
Pages : 12
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Book Description
Cummins, Hasset, and Oliner(American Economic Review, 2006) construct a new measure of fundamentals, and show that the positive cash flow effects typically found in investment-Q models disappear when traditional Q is replaced with their new measure. Their results are not robust to small changes in their specification or in the dataset used to estimate their model. The explanatory power of cash flow does not disappear when replacing traditional Q with their new measure of Q; it is never there to begin with. Investment's lack of sensitivity to cash flow may be because their data is biased towards firms with positive cash flow (it is negative for only 242 observations of 11431). This bias and our results mute their argument that the positive cash-flow effects obtained in such models may reflect a failure to control properly for fundamentals rather than the presence of financial constraints.
Author: Jason G. Cummins
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Author: Robert Lensink
Publisher: Edward Elgar Publishing
ISBN: 9781782541240
Category : Business & Economics
Languages : en
Pages : 176
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Book Description
This book presents an up-to-date overview of the theory as well as the empirics of the relationship between investment, financial imperfections and uncertainty. After reviewing the capital market imperfections literature and the empirical results, the authors discuss both traditional investment models with uncertainty and the more modern option based models. They present an overview of empirical results of the modelling of investment under uncertainty. In these examples the effects of capital market imperfections on investment are carefully considered. The authors conclude that there is overwhelming empirical support for a negative uncertainty-investment relationship. This book should appeal to academics with an interest in investment theory, professionals in the financial sector and students of macroeconomics and finance. "Investment, Capital Market Imperfections, and Uncertainty" assumes only a basic knowledge of mathematics and is easily accessible.
Author: Paul Povel
Publisher:
ISBN:
Category :
Languages : en
Pages : 57
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Book Description
We analyze how the availability of internal funds affects a firm's investment in the presence of capital market imperfections. Using a model that endogenizes the cost of external funds and allows for negative levels of internal funds, we show that under otherwise standard assumptions, investment is a U-shaped function of internal funds. As internal funds decrease, the cost of maintaining a given investment increases, which makes a smaller investment more attractive. For low internal funds, however, the firm will be induced to invest more, not less: a larger investment generates more revenue, which makes it easier to repay the lender and therefore benefits the firm. We test our theory using an unusually comprehensive data set, and find strong support for our predictions. In particular, we find a negative relation between internal funds and investment for a sizable fraction of firms with low (negative) levels of internal funds. Our results qualify conventional wisdom about the effects of financial constraints on investment behavior, and help to explain seemingly conflicting findings in the empirical literature.
