During the last decade, exploring the link between financial factors and investment has become a major field of theoretical and empirical publications. Some empirical findings indicate that young, fast growing, low dividend paying firms are faced with more liquidity constraints than other firms and therefore show stronger reactions concerning investments to changes of their internal financial flow.

Andreas Behr explores the role of financial factors in a firm's investment decision. He applies the Q-theory of investment to a unique database of German firms (the Deutsche Bundesbank's Corporate Balance Sheet Statistics) covering balance sheet data of 2 314 firms. The empirical results show a strong and significant influence of the calculated Q.

Autorentext

PD Dr. Andreas Behr lehrt am Institut für Ökonometrie und Wirtschaftsstatistik der Universität Münster.

Klappentext

Based on a unique database of German firms, the Deutsche Bundesbank's Corporate Balance Sheet Statistics, Andreas Behr explores the link between financial factors and a firm's investment decision within the framework of the Q-theory of investment.

Inhalt

The Q-theory of investment and the role of internal funds: Investment, information and incentive problems in capital markets Dynamic panel data estimation The data source and measurement problems: The capital stock at replacement costs and Q Empirical findings