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Financial liberalization and allocation of capital : dark side of the moon

Bhaduri, Saumitra; Bhattacharya, Aditi - In: Journal of quantitative economics 16 (2018) 4, pp. 163-185

Persistent link: https://www.econbiz.de/10012418610

Verona, Fabio - 2019

The empirical performance of the Q theory of investment can be significantly improved by simultaneously considering the … with the Q theory. The results show that there is a positive, stable medium-to-long-run relationship between investment and … time- and the frequency-varying features of the investment-Q relationship. Using continuous wavelet tools, I assess the …

Persistent link: https://www.econbiz.de/10012901123

Inefficient Credit Booms

Lorenzoni, Guido - 2008

This paper studies the welfare properties of competitive equilibria in an economy with financial frictions hit by aggregate shocks. In particular, it shows that competitive financial contracts can result in excessive borrowing ex ante and excessive volatility ex post. Even though, from a...

Persistent link: https://www.econbiz.de/10012773218

Incentives for Information Production in Markets Where Prices Affect Real Investment

Dow, James - 2016

lead to a market breakdown where information production ceases, and investment and firm value collapse. Our theory sheds …We analyze information production incentives for traders in financial markets, when firms condition investment …'s investment project increases with the ex ante likelihood the project will be undertaken. This generates an informational …

Persistent link: https://www.econbiz.de/10013006979

Financial Intermediaries, Markets and Growth

Fecht, Falko - 2016

We build a model in which financial intermediaries provide insurance to households against a liquidity shock. Households can also invest directly on a financial market if they pay a cost. In equilibrium, the ability of intermediaries to share risk is constrained by the market. This can be...

Persistent link: https://www.econbiz.de/10012991332

Investment Opportunity Sets, Operating Uncertainty, and Capital Market Pressure : Determinants of Investments in Tax Shelter Activities?

McGuire, Sean T. - 2019

firm's overall investment strategy. We examine whether three factors associated with traditional investment behavior (firms …' investment opportunity sets, operating uncertainty, and capital market pressure) are also associated with investments in tax … shelter activities. Our results suggest that firms with large investment opportunity sets and higher operating uncertainty are …

Persistent link: https://www.econbiz.de/10012905253

Financial Markets and the Allocation of Capital

Wurgler, Jeffrey - 2013

sectors increase investment more in their growing industries, and decrease investment more in their declining industries, than …

Persistent link: https://www.econbiz.de/10013091985

Financial Intermediaries, Markets, and Growth

Fecht, Falko; Huang, Kevin X. D.; Martin, Antoine - 2019

-sharing intermediaries can offer. In this paper we study a model in which markets also promote investment in a productive technology. A trade …

Persistent link: https://www.econbiz.de/10014070836

Episodes of Financial Deepening : Credit Booms or Growth Generators

Rousseau, Peter L. - 2016

One strand of the economics literature addresses financial deepening as a precursor to economic growth. Another views it as a cause of financial crises. We examine historical data for 17 economies from 1870 to 1929 to distinguish episodes of growth induced by financial deepening from crises...

Persistent link: https://www.econbiz.de/10012987647

Financial Market Shocks and the Macroeconomy

Subrahmanyam, Avanidhar - 2013

Feedback from stock prices to cash flows occurs because information revealed by firms' stock prices influences the actions of competitors. We explore the implications of feedback within a noisy rational expectations setting with incumbent publicly traded firms and privately held new entrants. In...

Persistent link: https://www.econbiz.de/10012459278