Dynamic Investment Models and the Firm's Financial Policy

Stephen Bond and Costas Meghir

CEPR Financial Market Papers from Centre for Economic Policy Research

Abstract: The aim of this paper is to characterize the empirical implications for dynamic investment models of the hierarchy of finance model of corporate finance and to test these implications using firm level data. The model we estimate is based on the Euler equation for optimal capital accumulation in the presence of convex adjustment costs. The theoretical model explicitly allows for debt finance and considers the implications of allowing firms to accumulate financial assets. The empirical investigation uses UK company panel data to estimate dynamic investment models by GMM and to test the derived implications.

Keywords: Corporate Finance; Capital Accumulation; Debt Finance (search for similar items in EconPapers)
Date: 1990-02
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Dynamic Investment Models and the Firm's Financial Policy (1994)
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:cpr:ceprfm:0013

Access Statistics for this paper

More papers in CEPR Financial Market Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().