Feed-in tariffs (FiTs) have been instrumental in expanding renewable electricity generation but can distort investment by insulating producers from market price volatility. This paper develops a twostage model of electricity markets with stochastic demand and supply shocks, showing that a higher...

This study investigates how credit supply shocks impact firm-level investment across the euro area using the novel AnaCredit database. Employing the methodology developed by Amiti and Weinstein (2018), we decompose loan growth rates into four components: bank-specific, firm-specific,...

Germany has introduced a comprehensive package of staggered business tax breaks to accelerate business investment and give new momentum to economic growth. The key components of the so-called investment booster program are a temporary tax write-off on machinery and other equipment investments to...

Investment has been low in the last decades (both by firms and by government). This does not only hold for fixed capital including R&D, but also for investment in climate, housing, infrastructure and education. Productivity has been low too and should be stimulated, as is elaborated in the...

The yen depreciation from 2012-2015 reduced robot prices for U.S. firms. Paradoxically, financially constrained firms dramatically increased adoption relative to their unconstrained peers. We rationalize this with a collateral model: robots are pledgeable assets requiring non-pledgeable...

This study examines how firms' financial heterogeneity shapes the transmission of monetary policy to investment in Latin American economies. It develops an extended theoretical model with heterogeneous firms, calibrated for Latin American economies, and validates it empirically through local...

We present a new dynamic model of corporate investment in imperfectly-competitive product markets, extending the neoclassical (Q) theory of capital to a multi-firm, multi-product, fully-structural model. Our model embeds a state-of-the-art hedonic demand system, endogenizes firms' markups and...

This study provides new evidence on how production digitalization investment affects firm financial performance across diverse European regions. A panel of 14,935 firm-year observations from 30 countries (2012-2022), including a focused Baltic subsample, is used alongside a refined digital...

We revisit the credit channel of monetary policy when firms face multiple financing constraints, a common feature of corporate financing we document empirically. Our theory shows that the multiplicity of constraints dampens the transmission of expansionary policy to firm borrowing and investment...

We argue that secular change in both the production and composition of investment goods has weakened investment's role in the transmission of monetary policy to labor earnings and consumption. We show analytically that fluctuations in the production of investment goods amplify the response of...

This paper studies the firm-level impact of the world’s largest targeted capital import subsidy program implemented in China. Drawing on rich manufacturing firm survey data, product-level trade transactions, and a comprehensive list of capital goods eligible for subsidies, we exploit variation...

We study the investment channel of monetary policy through a randomized survey experiment, exposing Swiss firms directly to shocks to the Swiss National Bank's policy rate. Our survey experiment randomizes pure policy-rate shocks - uncontaminated by information effects - and records firms'...

This paper studies the role of capacity utilisation in explaining investment behaviour in Italian SMEs and large firms. We propose a framework in which firms with high capacity utilisation are more likely to invest in maintaining a buffer against future shocks. Using firm-level data from the...

We provide novel evidence on the incidence of business taxes using comprehensive survey and experimental data from German firms. Leveraging randomized variation in hypothetical tax changes, we find that the incidence of profit taxes is highly asymmetric. Tax decreases are more likely to benefit...

Effective policymakers must balance the demands of formulating a corporate tax system that raises revenue and spurs economic activity (e.g., investment) while promoting a "level playing field" across firms. Balancing these tradeoffs has likely caused tax systems to become more complex over time,...

Foreign direct investment (FDI) is often seen as a means to boost domestic investment and, hence, capital accumulation. Yet, the empirical support for such a positive investment effect of FDI is inconclusive. A possible reason is that FDI is often directed towards the financial sector, where...

The green transition of the EU economy will require substantial investment to 2030 and beyond. Estimates of green investment needs vary between institutions and are surrounded by high uncertainty, but they all point to a requirement for faster and more ambitious action. Green investment will...

This study considers the short-term lead-lag relationships between profits, private investment, and output. The interplay between the variables is examined using quarterly data for Germany during the 1991Q2-2020Q3 period. The methodology comprises: examination of the cross-correlations; the...

In this paper, we show that the existing models and descriptions of the transfer of capital between countries that are provided in international economics are inadequate because they fail to explain the causes of, or the consequences of, persistent trade imbalances and because the assumption...

The purpose of this study was to analyse existing investment projects in Albania and assess their economic feasibility to determine their impact on the country's economic growth and development. The study examined 30 major investment projects in key sectors such as energy, infrastructure, and...

We investigate the impact of expectations about future climate policy on investment decisions of fossil fuel firms. Our empirical analysis reveals that firms with greater exposure to climate change significantly increased their investment in response to the Paris Agreement, in contrast to firms...

Purpose: This article focuses on the problem of deciding the annual investment that a company should allocate to the rehabilitation of its water distribution and sanitation networks. The objective is to find the investment amount necessary to maintain an adequate quality and sustainability of...

This study outlines the features of financing investment development in Sub-Saharan African countries. Using the financial determinants of GDP, a model was developed based on the method of least squares employing data covering 2004-2018. It was revealed that a positive correlation exists between...

This study examines the relationship between the business sentiment of Japanese companies regarding promising or potential countries for investment and macroeconomic statistics, such as economic or population growth in Thailand, using data from the Survey Report on Overseas Business Operations...