The influence of financial constraints and real options on corporate investment decisions
This paper presents evidence of the negative combined effect of financial constraints and real options on corporate investment. Using panel data on public companies functioning in developed countries, the authors prove that with increasing uncertainty surrounding a firm, the real options effect increases the influence of financial constraints on investment. To this end we have found the threshold value of the option multiple, which switches the uncertainty regimes from relatively high to relatively low, and we have constructed an index of financial constraints.
|Date of creation:||2013|
|Date of revision:|
|Publication status:||Published in WP BRP Series: Financial Economics / FE, September 2013, pages 1-21|
|Contact details of provider:|| Postal: Myasnitskaya 20, Moscow 101000|
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