This paper is concerned with some feasibility issues in mathematical programs with equilibrium constraints (MPECs) where additional joint constraints are present that must be satis ed by the state and design variables of the problems. We introduce su cient conditions that guarantee the feasibility of these MPECs. It turns out that these conditions also guarantee the feasibility of the quadratic...

This paper tests for the importance of cash flow on investment in fixed capital and R&D using firm-level panel data in two countries between 1985 and 1994. For German firms, cash flow is not informative in simple econometric models of fixed investment or R&D. In identical specifications for British firms, cash flow is informative about investment, although not about the level of R&D spending co...

There is growing support for taxes on short-term capital inflows in emerging markets, such as the encaje adopted by Chile from 1991-98. Previous empirical assessments of the encaje conclude that it may have generated some small economic benefits, such as shifting the composition of capital inflows to a longer maturity, but no significant economic costs. Managers of small and medium-sized compan...

the objective of this study is to examine the effect of mispricing on firm’s investment behavior and capital structure. it also tests the role of the level of financial constraints in the relationship between mispricing , investment and capital structure. using data of 110 firms of tehran stock exchang from 1384-1389, results indicated that mispricing has negative impact to firms investment. ho...

Convexity arises quite naturally in financial risk management. In risk preferences concerning random cash-flows, convexity corresponds to the fundamental diversification principle. Convexity is a basic property also of budget constraints both in classical linear models as well as in more realistic models with transaction costs and constraints. Moreover, modern securities markets are based on tr...

In a production economy with trade in financial markets motivated by the desire to share labor-income risk and to speculate, we show that speculation increases volatility of asset returns and investment growth, increases the equity risk premium, and reduces welfare. Regulatory measures, such as constraints on stock positions, borrowing constraints, and the Tobin tax have similar effects on fina...

Financial constraints have been found to play an important role on various aspects of firm behavior. Yet, their effects on firm survival have been largely neglected. We use a panel of 9420 newly established UK firms over the period 1997-2002 to study the effects of financial variables on firms’ failure probabilities, differentiating firms into globally engaged and purely domestic. Estimating a ...

Financial constraints have been found to play an important role on various aspects of firm behavior. Yet, their effects on firm survival have been largely neglected. We use a panel of 61496 UK firms over the period 19972002 to study the effects of financial variables on firms’ failure probabilities, differentiating firms into globally engaged and purely domestic. Estimating a wide range of spec...