Financial Frictions and Investment Dynamics in Multi-Plant Firms
Matthias Kehrig and
Working Papers from U.S. Census Bureau, Center for Economic Studies
Using confidential Census data on U.S. manufacturing plants, we document that most of the dispersion in investment rates across plants occurs within rms instead of across firms. Between- firm dispersion is almost acyclical, but within- rm dispersion is strongly procyclical. To investigate the role of rms in the allocation of capital in the economy, we build a multi-plant model of the firm with frictions at both levels of aggregation. We show that external nancing constraints at the level of the rm can have important implications for plant-level investment dynamics. Finally, we present empirical evidence supporting the predictions of the model.
Keywords: Investment; Plants vs. Firms; Q-Theory; Internal vs. External Capital Markets; Diversification Discount. (search for similar items in EconPapers)
JEL-codes: E2 G3 (search for similar items in EconPapers)
Pages: 32 pages
New Economics Papers: this item is included in nep-bec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
https://www2.census.gov/ces/wp/2013/CES-WP-13-56.pdf First version, 2013 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:13-56
Access Statistics for this paper
More papers in Working Papers from U.S. Census Bureau, Center for Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Dawn Anderson ().