کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
959999 | 929397 | 2007 | 27 صفحه PDF | دانلود رایگان |
![عکس صفحه اول مقاله: Testing Q theory with financing frictions Testing Q theory with financing frictions](/preview/png/959999.png)
We develop a Q theory of investment under financing constraints. The firm invests and saves optimally facing convex costs of external equity, overhang from outstanding debt, and collateral constraints on new borrowing. Overhang and costs of external equity discourage investment. Conversely, firms anticipating collateral constraints experience a side benefit from investing as installed capital relaxes future constraints. Empirical tests support the model. Conditional on average Q, investment is lower for equity issuers and for firms with large debt overhang. The Kaplan and Zingales and the Whited and Wu indices are used as proxies for future collateral constraints. Consistent with the model, both indices enter investment regressions positively.
Journal: Journal of Financial Economics - Volume 83, Issue 3, March 2007, Pages 691–717