EconPapers    
Economics at your fingertips  
 

Does Asset Durability Impede Financing? An Empirical Assessment

Nusrat Jahan ()
Additional contact information
Nusrat Jahan: Department of Economics, Carleton University, https://carleton.ca/economics/people/jahan-nusrat/

No 20-17, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: Does asset durability limit firms’ ability to obtain external financing when they are financially constrained? Using the depreciation rate to measure asset durability, I find financing frictions can affect firm investment through the asset durability channel. Specifically, asset durability increases external financing costs for financially constrained firms, but the effect is ambiguous for unconstrained firms. Additionally, I find when firms endogenously choose asset durability, more (less) financially constrained firms invest in less (more) durable capital. These results provide mixed support to the idea that the durability of an asset impedes financing.

Pages: 39 pages
Date: 2020-09, Revised 2022-08
New Economics Papers: this item is included in nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Published: Carleton Economics Papers

Downloads: (external link)
https://carleton.ca/economics/wp-content/uploads/cewp20-17-6.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:car:carecp:20-17

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Carleton Economic Papers from Carleton University, Department of Economics C870 Loeb Building, 1125 Colonel By Drive, Ottawa Ontario, K1S 5B6 Canada.
Bibliographic data for series maintained by Sabrina Robineau ( this e-mail address is bad, please contact ).

 
Page updated 2023-02-07
Handle: RePEc:car:carecp:20-17