Investments and financial structure with imperfect financial markets: an intertemporal discrete-time framework
AbstractThis paper deals with the problem of simultaneity between the firm's investments and financial structure, in a context of dynamic optimization, characterised by two main assumptions: first of all, diverging incentives for managers and shareholders, secondly, financial markets imperfections generating a risk premium on the borrowed finance. A ''discrete-time'' framework has been introduced in order to better model the relevance of timing in the co-ordination process between financial and investment decisions, assumed to take place simultaneously. The simple model proposed here may provide some intuitive interpretation for a number of phenomena such as the propagation of financial shocks into the real economy and the countercyclical mark-ups.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Universita di Modena e Reggio Emilia, Dipartimento di Economia Politica in its series Heterogeneity and monetary policy with number 0008.
Length: pages 14
Date of creation: Jul 2000
Date of revision:
investments; financing policy.;
Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michel Poitevin, 1989. "Collusion and the Banking Structure of a Duopoly," Canadian Journal of Economics, Canadian Economics Association, vol. 22(2), pages 263-77, May.
- Kurz, Mordecai, 1994. "On Rational Belief Equilibria," Economic Theory, Springer, vol. 4(6), pages 859-76, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Giuseppe Marotta).
If references are entirely missing, you can add them using this form.