Optimal capital stock and financing constraints

In this paper we show that financing constraints affect the optimal level of capital stock even when the financing constraint is ineffective. This happens when the firm rationally anticipates that access to external financing resources may be rationed in the future. We will show that with these expectations, the optimal investment policy is to invest less in any given period, thereby lowering the desired optimal capital stock in the long run.

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Year of publication:	2011-11-29
Authors:	Saltari, Enrico ; Giuseppe, Travaglini

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Type of publication:	Book / Working Paper
Language:	English
Notes:	Saltari, Enrico and Giuseppe, Travaglini (2011): Optimal capital stock and financing constraints.
Classification:	E51 - Money Supply; Credit; Money Multipliers ; E22 - Capital; Investment (including Inventories); Capacity ; E44 - Financial Markets and the Macroeconomy
Source:	BASE

Persistent link: https://www.econbiz.de/10015229580