Hardback
Firms’ Investment and Finance Decisions
Theory and Empirical Methodology
9781843763994 Edward Elgar Publishing
This book provides coherent theoretical and empirical analysis of firms’ investment and financing decisions. It assesses the role of uncertainty, financial imperfections, corporate governance and taxation. Evidence is obtained using several unique and high quality microeconomic data-sets, which explore features seldom addressed.
More Information
Contributors
Contents
More Information
This book provides coherent theoretical and empirical analysis of firms’ investment and financing decisions. It assesses the role of uncertainty, financial imperfections, corporate governance and taxation. Evidence is obtained using several unique and high quality microeconomic data-sets, which explore features seldom addressed.
Overall, the empirical results confirm theoretical precedents. Some firms are indeed financially constrained, for fixed investment as well as for R&D projects. The ‘free cash-flow’ hypothesis holds, that is managers divert excess funds away for their own interests, but less so in closely controlled companies. In accordance with the real option theory, the results suggest that uncertainty leads firms to adopt a ‘wait and see’ strategy which eventually reduces investment, especially for irreversible investment. Corporate governance features are shown to affect managers, discipline and companies’ restructuring plans. Finally, different tax reforms are evaluated, and an alternative tax structure that would stimulate growth is proposed.
Scholars, including those with an interest in microeconomics and econometrics, and staff within central banks and national and international organisations will also find the book of interest, as will policymakers and decision-makers concerned with the role of financing, corporate governance and taxation on firm’s decisions.
Overall, the empirical results confirm theoretical precedents. Some firms are indeed financially constrained, for fixed investment as well as for R&D projects. The ‘free cash-flow’ hypothesis holds, that is managers divert excess funds away for their own interests, but less so in closely controlled companies. In accordance with the real option theory, the results suggest that uncertainty leads firms to adopt a ‘wait and see’ strategy which eventually reduces investment, especially for irreversible investment. Corporate governance features are shown to affect managers, discipline and companies’ restructuring plans. Finally, different tax reforms are evaluated, and an alternative tax structure that would stimulate growth is proposed.
Scholars, including those with an interest in microeconomics and econometrics, and staff within central banks and national and international organisations will also find the book of interest, as will policymakers and decision-makers concerned with the role of financing, corporate governance and taxation on firm’s decisions.
Contributors
Contributors: R. Anderson, I. Angeloni, K. Baeyens, V. Bastin, P. Butzen, D. Cassimon, J.-B. Chatelain, M. Cincera, A. Corhay, L. de Haan, P.-J. Engelen, J. Franks, C. Fuss, M. Gérard, G. Hübner, D. Jorgenson, C. Kegels, S. Manigart, C. Mayer, H. Meersman, P.-A. Michel, G. Quaden, S. Schich, F. Schivardi, M. Thiel, L. Trigeorgis, P. Van Cayseele, P. Vanhoudt, M. Van Wouwe, P. Vermeulen, F. Verschueren, I. Verschueren, U. von Kalckreuth, K.-Y. Yun
Contents
Contents: Foreword by Guy Quaden Introduction 1. Lifting the Burden: Fundamental Tax Reform and US Economic Growth 2. Structural Modelling of Financial Constraints on Investment: Where Do We Stand? 3. Capital Market Imperfections and Investment: Evidence from Belgian Panel Data 4. Investment, R&D and Liquidity Constraints: A Corporate Governance Approach to the Belgian Evidence 5. Financing and Investment Interdependencies in Unquoted Belgian Companies: The Role of Venture Capital 6. Financing Constraints, Fixed Capital and R&D Investment Decisions of Belgian Firms 7. Real Options and Investment under Uncertainty: What Do We Know? 8. Development Path and Capital Structure of Belgian Biotechnology Firms 9. Investment, Uncertainty and Irreversibility: Evidence from Belgian Accounting Data 10. The Impact of Uncertainty on Investment Plans: A Survey Data Approach 11. Governance as a Source of Managerial Discipline 12. Capital Structure, Firm Liquidity and Growth Bibliography Index
