Consistent with the model, both indices enter investment regressions positively. Introduction The effect of financing imperfections on investment remains a topic of continued interest.1 The workhorse structural
The empirical tests demonstrate that both the endogeneity and non-linearities created by real and financing frictions are economically significant. The paper provides a rationale for the documented poor performance of Q-theory in explaining investment, and for the differential performance of the ...
Wu, and Q. Wang. 2018. A Common Pitfall in Bank Stress Testing: Macroeconomic Factors and Model Instability. https://ssrn.com/abstract=2896974 Batten, S., R. Sowerbutts, and M. Tanaka. Climate Change: Macroeconomic Impact and Implications for Monetary Policy. In Ecological, Societal, and ...
Testing Q theory with financing frictions, Journal of Financial Economics 83, 691-717.Hennessy, Christopher A., Amnon Levy, and Toni M. Whited, 2007, Testing q theory with financ- ing frictions, Journal of Financial Economics 83, 691-717....