Does firms' financial status affect plant-level investment and exit decisions?

Joachim Winter ()

No 98-48, Papers from Sonderforschungsbreich 504

Abstract: This paper investigates the influence of a firm's financial status on the within-firm allocation of funds, reflected in its plant-level investment and exit decisions. In the empirical analysis, financial status is measured by both standard measures and an indicator variable recently suggested by Kaplan and Zingales. Based on these firm-level financial variables and on plant-level investment and production data from the U.S. Census Bureau's Longitudinal Research Database (LRD), econometric models of plant operating regimes are estimated which summarize investment and exit decisions. The empirical evidence supports the view that firm-level financial status affects investment and market exit decisions observed at the plant level.

Keywords: investment; divestiture; financial constraints (search for similar items in EconPapers)
JEL-codes: D92 E44 G31 (search for similar items in EconPapers)
Date: 1998
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https://madoc.bib.uni-mannheim.de/2864/1/dp98_48.pdf

Related works:
Working Paper: Does Firms' Financial Status Affect Plant-Level Investment and Exit Decisions? (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:mnh:spaper:2864

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