Using a new dataset of 369 manufacturing firms in developing countries, we present the first firm-level analysis of capital account liberalization and investment. In the three-year period following liberalizations, the growth rate of the typical firm’s capital stock exceeds its preliberalization mean by an average of 4.1 to 5.4 percentage points per year. We use a simple model of Tobin’s q to d...

Our objective in this paper is to develop a decision-making model to assist decision-makers and researchers in understanding the effect of multiple criteria decision-making on a capital budgeting investment. This decision-making model helps decision-makers with reducing decision-making time and choosing a suitable decision alternative for a capital budgeting investment within the companies’ goa...

This paper, using individual data from Japan, explores how the circumstances of where a person resides is related to the degree of their investment in social capital. Controlling for unobserved area-specific fixed effects and various individual characteristics, I found: (1) not only is the rate of homeowners in a locality positively related to investment in social capital, but also the rate of ...

The issue of whether government capital is productive has received a great deal of attention recently, yet empirical analyses of public capital productivity have generally been limited to the official capital stock estimates available in a small sample of countries. Alternatively, many researchers have investigated the output effects of public investment—recognizing that investment may be a poo...

A simple model of discretionary worker investment in human capital is developed in which worker productivity is affected by a firm-specific match and employers bid strategically for workers. The labor market returns a share of specific capital productivity to workers without Nash bargaining power and without recourse to long-term contracts, because efficient turnover transforms a worker’s forme...

This paper studies optimal investment behavior in a clay-clay production environment. The model describes a firm producing one good on an imperfectly competitive output market, using capital and labor services. Existence and comparative dynamics of an optimal policy are studied. The model is calibrated for the U.S. manufacturing sector and numerical simulation experiments indicate that the repl...

This paper tests whether the 2003 dividend tax cut—one of the largest reforms ever to a US capital tax rate—stimulated corporate investment and increased labor earnings, using a quasi-experimental design and US corporate tax returns from years 1996–2008. I estimate that the tax cut caused zero change in corporate investment and employee compensation. Economically, the statistical precision chal...

Economic growth is determined by the supply and demand of investment capital; technology determines the demand for capital, while human nature determines the supply. The supply curve has two distinct parts, giving the world economy two distinct modes. In the familiar slow growth mode, rates of return are limited by human discount rates. In the fast growth mode, investment is limited by the worl...

This paper studies theoretically how the cross-country differences in the institutional quality (IQ) of the domestic credit markets shape the patterns of international capital flows when such IQ differences cause productivity differences across countries. IQ affects productivity by changing productivity-agency cost trade-offs across heterogeneous investment projects, which have opposite effects...

Is the stock market boom a result of the baby boom? This paper develops an overlapping generations model in which a baby boom is modeled as a high realization of a random birth rate, and the price of capital is determined endogenously by a convex cost of adjustment. A baby boom increases national saving and investment and thus causes an increase in the price of capital. The price of capital is ...