Footnote:
In: American Economic Review, Vol. 91, No. 5, 2001
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 1, 2001 erstellt
Description:
We examine investment behavior when firms face costs in the access to external funds. We find that despite the existence of liquidity constraints, standard investment regressions predict that cash flow is an important determinant of investment only if one ignores q. Conversely, we also obtain significant cash flow effects even in the absence of financial frictions. These findings provide support to the argument that the success of cash flow augmented investment regressions is probably due to a combination of measurement error in q and identification problems