We study the implications of the creative destruction lifecycle of innovation for asset prices. We develop a general equilibrium model of endogenous firm creation and destruction where “incremental” innovations by incumbents and “radical” innovations by entrants drive the volatility of growth prospects of the economy. Higher entry—bigger threat of displacement of incumbents by entrants—implies ...

The study analyzes the impact of foreign direct investment (FDI) and domestic investment (DI) on economic growth in Sub-Saharan Africa for the period 1990–2003. The results show that DI is positive and significantly correlated with economic growth in both the OLS and fixed effects estimation, but FDI is positive and significant only in the OLS estimation. The study also found that FDI has an in...

Silacyclopropanes reacted with carbonyl compounds under mild conditions (10 mol % metal salt, e22 °C) in a stereospecific and highly stereo-, regio-, and chemoselective fashion. In most cases, CuI or CuBr2 were the optimal catalysts although ZnBr2 worked comparably well in a few examples. Insertion occurred with retention of configuration and, in the case of enals and formamides, with high dias...

This study tests for the presence of real options effects induced by uncertainty and (partial) irreversibility on fixed capital investment using Italian company data. Our approach recognizes that firm-level investment spending may, itself, be aggregated over multiple investment decisions in separate types of capital goods and emphasizes effects of uncertainty on short-run investment dynamics. U...

The corporate finance literature suggests that a financially constrained firm invests less than an identical unconstrained firm. This does not imply that financial frictions cause firms to invest less than in a frictionless economy. When firms compete for investment funds, an increase in financial frictions can lead individual firms to increase their investment levels. A greater than the fricti...

We examine inventory adjustment in the U.S. manufacturing sector using quarterly rmlevel data over the period 1978{97. Our evidence indicates that the inventory investment process is nonlinear and asymmetric, results consistent with a nonconvex adjustment cost structure. The inventory adjustment process di ers over the business cycle: for a given level of excess inventories, rms disinvest more ...

Although investment has played an important role in China’s phenomenal economic growth over the last two decades, there has been little research on investment determination at the macro level. This study sets out to explore and explain the factors that influence China’s aggregate investment measured by the fixed capital formation during the reform period and to draw useful conclusions from anal...

there are two main reasons for studying investment in an economy. first, the combination of firms? investment demand and household?s saving supply determines how much of an economys? resoures is invested. second, investment is highly volatile; thus investment demand may be important in the short-run fluctuations. the present article examins the relationship and veracity of existence of banks pr...