Aggregate Liquidity, Financial Constraints, and Corporate Investment

2008 ◽  
Author(s):  
Ander Perez
Keyword(s):  
Financial Constraints ◽  
Corporate Investment

Financial Constraints, Mispricing and Corporate Investment

2009 ◽  
Author(s):  
George Wong ◽  
Robert W. Faff ◽  
Wing Chun Kwok ◽  
Xin Chang
Keyword(s):  
Financial Constraints ◽  
Corporate Investment

scholarly journals The Fiscal Multiplier of Public Investment

2020 ◽  
Vol 20 (199) ◽  
Author(s):  
Raphael Espinoza ◽  
Juliana Gamboa-Arbelaez ◽  
Mouhamadou Sy
Keyword(s):  
Financial Constraints ◽  
Public Investment ◽  
Private Investment ◽  
Corporate Investment ◽  
Fiscal Multiplier

This paper explores whether public investment crowds out or crowds in private investment. To this aim, we build a database of about half a million firms from 49 countries. We find that the effect of public investment on corporate investment depends both on leverage and financial constraints. Public investment boosts private investment for firms with low leverage. However, for firms with high leverage, private investment does not react to an increase in public investment, in line with theory (Myers 1977). We also find that the effect of public investment on corporate investment is much weaker for firms that are financially constrained.

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