Abstract
Recent theoretical and empirical literature on firm-level investment has focused on the role of financial factors and liquidity on the investment decision, partly in an attempt to understand why these factors appear to have as much influence as they do on investment (see Schiantarelli, 1996, and Hubbard, 1998, for two recent surveys of this literature). An open and somewhat contentious question remains whether these financial factors are proxying for demand shocks or whether their presence in the investment equation indicates that firms are subject to liquidity constraints or an inability to finance all their desired investments.1
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Mulkay, B., Hall, B.H., Mairesse, J. (2001). Firm Level Investment and R&D in France and the United States: A Comparison. In: Bundesbank, D. (eds) Investing Today for the World of Tomorrow. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-56601-1_19
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DOI: https://doi.org/10.1007/978-3-642-56601-1_19
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