This paper investigates the relationship between a firm's investment decision and its financial situation. We present a … model of investment, where the cost of external finance is increasing in the debt ratio. The model is estimated using a …

their investment decisions. Moreover, financial con-straints become more severe in times of restrictive monetary policy. …

investment during the years in 2004-2009, and whether this impact, if it existed, differed among companies with differing … investment opportunities. The study has reveals the total debt ratio did have a negative impact on fixed investment among … Jordanian listed companies. It has also been found that the bank ratio had a stronger impact on fixed investment than the total …

:This article treats the correlation between the investment projects and financing difficulties in a vicious circle … negotiation between the economic boom and the financial imbalances. Secondly, the investment decisions should be close connected …

. First, empirically, financial activity is lumpy, more than investment activity. Second, non-convex costs are necessary, in … the context of a dynamic investment and financing model, to rationalize this lumpiness. Two versions of the model, with …, generating financial lumpiness higher than investment lumpiness. Other predictions of the model with respect to investment and …

Do firms use credit line drawdowns to finance investment? Using a unique dataset of 467 COMPUSTAT firms with credit … with theory, our results confirm that firms use drawdowns to sustain investment after an idiosyncratic liquidity shock … investment increased to 16 percent. The effect was even larger for smaller and financially constrained firms. We find only …