We develop a model of investment under uncertainty for a firm facing external financing costs. Such a firm prefers to fund its investment through internal funds, so that the firm’s optimal investment policy and value now depend on the size of its retained earnings. We show that the standard real options results are significantly modified when there are external financing costs. Importantly the ...

This paper studies the effects of fiscal rules on public investment. Economists argue that decrease investment, as it is easier for governments to lower investment than current expenditures. presents an empirical assessment relationship between and using European panel data covering 1997–2016 period. In contrast previous work, we focus national use Commission's Fiscal Rules Strength Index measu...

Purchases of computers, software, and communications equipment grew rapidly during the 1990s, representing an increasing share of total U.S. investment spending over the course of the decade. Using official statistics from the U.S. Bureau of Economic Analysis (BEA), nominal investment expenditures for three categories—computers and peripheral equipment, software, and communications equipment—ro...

Environmental pollutants have become a dreadful problem and burning issues for the present world irrespective of a country who is responsible for it. The objective of the study is to investigate impact of financial development and institutional quality on environmental degradation. The study is based on panel data for developing and developed countries over the time of 1996-2016. For the empiri...

During the 1990s, market hours in the United States rose dramatically. The rise in hours occurred as gross domestic product (GDP) per hour was declining relative to its historical trend, an occurrence that makes this boom unique, at least for the postwar U.S. economy. We find that expensed plus sweat investment was large during this period and critical for understanding the movements in hours a...

Since the 1980s, tax depreciation allowances are used less as instruments of macroeconomic stabilization and more long-term measures to stimulate investment. This paper tabulates types accelerated in South Africa calculates magnitude these benefits addition standard across-the-board accounting by companies. Using anonymized assessment data from African Revenue Service, analysis generates aggreg...

We study how firms engaged in both R&D and fixed investment manage liquidity and adjust real investment during the recent financial crisis. Among firms with positive R&D expenditures, cuts to fixed investment in the crisis are typically far more severe than cuts to R&D. These firms allocate cash reserves to buffer R&D but do not use cash to protect fixed investment. Some firms appear to go so f...

Purpose – The high expenditures in information technology (IT) and the growing usage that penetrates the core of business have resulted in a need to effectively and efficiently evaluate strategic IT investments in organizations. The purpose of this paper is to propose a novel two-dimensional approach that determines the deferrable strategy with the most value by maximizing the real option value...