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| Kirchesch, Kai. |
| The link between investment and finance usually enters the empirical literature in the form of financial constraints which are defined as the wedge between the costs of internal and external finance or as the risk of being rationed on the credit market. In this context, the sensitivity of investment with respect to single internal or external finance indicators is assumed to be appropriate to proxy for these constraints. However, enterprises that rely on external funds do not only face this external finance premium and potential borrowing limits, but also the risk of not being able to meet their repayment obligations and thus the risk of bankruptcy. If the risk of bankruptcy enters the profit maximization of the firm, the resulting empirical investment... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Investment; Bankruptcy; Financial Constaints; GMM; Financial Economics; E22; D92; G33; C23. |
| Ano: 2004 |
URL: http://purl.umn.edu/26185 |
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