Imperfect Financial Markets and Investment Dynamics
نویسندگان
چکیده
This paper studies optimal dynamic investment and ...nancial policy of the ...rm, if the interest rate on the ...rm’s debt depends on its capital structure. We characterize the optimal investment and ...nancing decisions and show how the incentive to invest and the market value of the ...rm are a¤ected by ...nancial considerations. Conditions are derived under which average Q remains a su¢cient statistic for investment. Our results imply that empirical work must simultaneously analyze investment and ...nancial policy of the ...rm in order to determine whether ...nancial market imperfections a¤ect investment. We also derive an estimable investment equation that is valid even if ...nancial markets are imperfect. Our empirical results suggest that investment is indeed a¤ected by ...nancial market imperfections.
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تاریخ انتشار 2001