This paper derives an optimal investment function that combines Tobin's q with Goodwin's nonlinear accelerator. It provides microfoundations to the backward looking behavior of investment in Goodwin's model, and simultaneously allows the study of Tobin's q into a business cycle model

We investigate the relationship between a company's dividend strategy and its risk of takeover. Our results from a large panel of UK quoted companies suggest that higher dividend payments are associated with a significantly lower conditional probability (hazard) of takeover. Moreover, firms...

Recent theoretical developments relating to investment under uncertainty have highlighted the importance of irreversibility for the timing of investment expenditures and their expected returns. This has subsequently stimulated a growing empirical literature which examines uncertainty and...