The influence of moral hazard on investment in financially constrained and unconstrained firms

Keefe, Michael O’Connor and Robert Kieschnick

Finance Research Letters, 2014, vol. 11, issue 3, 272-281

Abstract: We extend Triole (2006) to link together two seemingly different cases – firms facing potential free cash flow problems versus firms facing financial constraints. The model predicts a large number of disparate findings in the empirical literature and so demonstrates its usefulness.

Keywords: Investment; Moral Hazard; Financial constraints; Free cash flow (search for similar items in EconPapers)
JEL-codes: D21 D82 G32 G35 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:11:y:2014:i:3:p:272-281

DOI: 10.1016/j.frl.2014.01.001

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