This paper examines how the investment of financially constrained firms varies with their level of internal funds. We develop a theoretical model of optimal investment under financial constraints. Our model endogenizes the costs of external funds and allows for negative levels of internal funds....

Railways restructuring takes place under very different circumstances and with very different goals in Western Europe, Central and Eastern Europe, and Russia. Observed improvements in productivity associated with vertical access and vertical separation in Western Europe are not certain to be...