The reduced form as an empirical tool: a cautionary tale from the financial veil
An analysis of the limitations of the reduced-form empirical strategy as a method of testing the Modigliani-Miller model of corporate financial structure, demonstrating that an empirical strategy that is not closely tied to an underlying economic theory of behavior will usually yield estimates that are too imprecise or too unreliable to form a basis for policy.
Volume (Year): (1996)
Issue (Month): Q I ()
|Contact details of provider:|| Postal: 1455 East 6th St., Cleveland OH 44114|
Web page: http://www.clevelandfed.org/
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
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.:
- Simon Gilchrist & Charles P. Himmelberg, 1995.
"Evidence on the Role of Cash Flow for Investment,"
95-01, New York University, Leonard N. Stern School of Business, Department of Economics.
- Simon Gilchrist & Charles P. Himmelberg, 1993. "Evidence on the role of cash flow for investment," Finance and Economics Discussion Series 93-7, Board of Governors of the Federal Reserve System (U.S.).
- Gilchrist, S. & Himmelberg, C.P., 1995. "Evidence on the Role of Cash Flow for Investment," Papers 95-29, Columbia - Graduate School of Business.
- Mougoue, Mbodja & Mukherjee, Tarun K, 1994. "An Investigation into the Causality among Firms' Dividend, Investment, and Financing Decisions," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 17(4), pages 517-30, Winter.
- Jeffrey MacKie-Mason, 1988.
"Do Taxes Affect Corporate Financing Decisions?,"
NBER Working Papers
2632, National Bureau of Economic Research, Inc.
- Jason G. Cummins & Kevin A. Hassett & R. Glenn Hubbard, 1994. "A Reconsideration of Investment Behavior Using Tax Reforms as Natural Experiments," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 1-74.
- Michael S. Long & Ileen B. Malitz, 1985. "Investment Patterns and Financial Leverage," NBER Chapters, in: Corporate Capital Structures in the United States, pages 325-352 National Bureau of Economic Research, Inc.
- Peterson, Pamela P. & Benesh, Gary A., 1983. "A Reexamination of the Empirical Relationship between Investment and Financing Decisions," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 18(04), pages 439-453, December.
- Smirlock, Michael & Marshall, William, 1983. " An Examination of the Empirical Relationship between the Dividend and Investment Decisions: A Note," Journal of Finance, American Finance Association, vol. 38(5), pages 1659-67, December.
- DeAngelo, Harry & Masulis, Ronald W., 1980. "Optimal capital structure under corporate and personal taxation," Journal of Financial Economics, Elsevier, vol. 8(1), pages 3-29, March.
- McCabe, George M., 1979. "The Empirical Relationship Between Investment and Financing: A New Look," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 14(01), pages 119-135, March.
- Fischer, Edwin O & Heinkel, Robert & Zechner, Josef, 1989. " Dynamic Capital Structure Choice: Theory and Tests," Journal of Finance, American Finance Association, vol. 44(1), pages 19-40, March.
- McDonald, John G. & Jacquillat, Bertrand & Nussenbaum, Maurice, 1975. "Dividend, Investment and Financing Decisions: Empirical Evidence on French Firms," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 10(05), pages 741-755, December.
- Titman, Sheridan & Wessels, Roberto, 1988. " The Determinants of Capital Structure Choice," Journal of Finance, American Finance Association, vol. 43(1), pages 1-19, March.
- Phoebus J. Dhrymes & Mordecai Kurz, 1967. "Investment, Dividend, and External Finance Behavior of Firms," NBER Chapters, in: Determinants of Investment Behavior, pages 427-485 National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:fip:fedcer:y:1996:i:qi:p:16-25. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (4D Library)
If references are entirely missing, you can add them using this form.