Dynamic Investment Models and the Firm's Financial Policy

Bond, Stephen; Meghir, Costas

doi:10.2307/2297978

Cited by 790 publications

(688 citation statements)

References 29 publications

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“…A number of previous studies have found evidence that increased liquidity availability generally impacts positively on fixed capital investment (e.g. Bond & Meghir, 1994;Fazzari, Hubbard, & Petersen, 1988). Some other works and, in particular, the empirical evidence suggest that financial pressure affects employment (Benito & Hernando, 2002;Bond & Meghir, 1994;Bond & Van Reenen, 2007;Cantor 1990;Nickell & Nicolitsas 1999;Sharpe 1994).…”

Section: Theoretical Frameworkmentioning

confidence: 98%

“…Bond & Meghir, 1994;Fazzari, Hubbard, & Petersen, 1988). Some other works and, in particular, the empirical evidence suggest that financial pressure affects employment (Benito & Hernando, 2002;Bond & Meghir, 1994;Bond & Van Reenen, 2007;Cantor 1990;Nickell & Nicolitsas 1999;Sharpe 1994). As suggested by Modigliani & Miller (1958) there is no association between a firm's financial structure and its value, implying that a firm's financing choice has no effect on its real operation.…”

Section: Theoretical Frameworkmentioning

confidence: 98%

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Assessing Determinants on Job Creation at the Firm Level: Swedish Micro Firm Data

Yazdanfar¹,

Salman²

2012

IJEF

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This study analyses job-creation determinants at the firm level for a panel of Swedish micro firms across four industry sectors, using the GMM (Generalized Method of Moments) system to analyse a database consisting of 12532 Swedish micro firms during 2007. It was found that the firms' size and age, the importance of debt financing and increased availability of liquidity are positively related to job creation as well as industry affiliation. Finally, the results suggest that a resource-based approach is at work in explaining job creation in micro firms. Unlike the majority of previous studies, this study is characterized by being based on a large and cross-sectoral firm-level dataset, testing a number of hypotheses driven from the resource-based approach. The present study contributes to the literature on the determinants of employment at the firm level as it investigates the importance of liquidity and financial leverage to firm labour demand dynamics in Sweden.

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Section: Theoretical Frameworkmentioning

confidence: 98%

Section: Theoretical Frameworkmentioning

confidence: 98%

Assessing Determinants on Job Creation at the Firm Level: Swedish Micro Firm Data

Yazdanfar¹,

Salman²

2012

IJEF

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“…Le capital se déprécie à chaque période t du montant 8K tl et s'accroît du niveau de l'investissement brut. La dépréciation est supposée constante dans le temps (comme Bond et Meghir, 1995).…”

Section: Françaisesunclassified

“…De plus, pour estimer les paramètres du modèle, les variables anticipées en début de période, non observées, sont remplacées par leurs valeurs réalisées ex post (rationalité des anticipations Hayashi, 1985). Dans le premier cas (absence de coûts de transaction et de contrainte d'endettement), on retrouve l'équation d'Euler obtenue sous l'hypothèse de maximisation du profit dans un contexte de perfection du marché du capital (Bond et Meghir, 1995) c'est-à-dire on obtient la relation suivante 1 :…”

Section: Françaisesunclassified

Imperfection du marché du capital et investissement des exploitations agricoles

Benjamin¹,

Phimister

2009

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Le but de notre article est de rechercher les déterminants des décisions d’investissement des exploitants agricoles français en présence d’imperfections du marché du capital. Les contraintes d’accès au marché du crédit qui semblent jouer un rôle croissant en France sont prises en compte en intégrant des coûts de transaction associés aux emprunts et en définissant un plafond d’endettement. L’introduction de ces imperfections conduit à la simultanéité entre les décisions financières et les décisions d’investissement de l’exploitation. Un des résultats du modèle est de montrer que, pour comprendre les variations du taux d’investissement, il est nécessaire de différencier les exploitations ayant contracté des emprunts sur deux années successives. Le modèle est estimé sur données de panel en utilisant la méthode des moments généralisés. Le modèle n’est pas rejeté par les données pour le sous-échantillon des exploitations où le chef d’exploitation a une formation générale, le sous-échantillon des grandes exploitations.This article looks for the determinants of the investment decisions for French farmers in presence of imperfections of the capital market. The access constraints to the credit market which seems to play a growing role in France are taken into account by integrating transaction costs associated with borrowings and by defining restrictions on credit. One result of the model is that it is necessary to differentiate farms according to their borrowing behaviour to understand the variations of the rate of investment. This model has been tested and estimated with french farm level panel data using Generalised Method of Moments. The results indicate that the model using the perfect capital market assumption is rejected. In contrast, the equations using the sample selection rule from the theoretical model are not rejected for big farms and for farms which are conducted by farm operators who have a high general education level

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“…In order to obtain data at constant prices, CD it has been deflated using st PY (the by-industry production deflator from NA, see e.g. Bond and Meghir, 1994):…”

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confidence: 99%