The elasticity of investment and R&D investment with respect to cash flow is unambiguously positive in a large panel of U.S. manufacturing firms from 1973 to 1987. even with proper controls for permanent differences across firms and for simultaneity. I argue that the evidence favors liquidity...

The recent wave of corporate restructuring in the United States has been accused of shortening the investment horizons of U.S. managers. This paper surveys the empirical and case study evidence on restructuring and investment behavior and reaches the following conclusions 1) A large fraction of...