An Analytic Framework For Interpreting Investment Regressions In The Presence Of Financial Constraints / Andrew B. Abel, Stavros Panageas.

Author
Abel, Andrew B. [Browse]
Format
Book
Language
English
Published/​Created
Cambridge, Mass. National Bureau of Economic Research 2020.
Description
1 online resource: illustrations (black and white);

Details

Related name
Series
  • Working Paper Series (National Bureau of Economic Research) no. w26898. [More in this series]
  • NBER working paper series no. w26898
Summary note
A financial constraint that prevents access to external funds induces non-classical measurement error in average q as a proxy for unobservable marginal q. Unlike classical measurement error, this measurement error biases upward the coefficient on average q in a univariate regression of investment on average q. In a multiple regression of investment on average q and cash flow, the coefficient on cash flow is positive. The positive cash-flow coefficient indicates the presence of a financial constraint, but it does not indicate a shortage of liquidity to fund current investment. In addition, the coefficient on average q is biased downward.
Notes
March 2020.
Source of description
Print version record
Statement on responsible collection description
Princeton University Library aims to describe library materials in a manner that is respectful to the individuals and communities who create, use, and are represented in the collections we manage. Read more...
Other views
Staff view
Need Help?
Ask a Question
Suggest a Correction
Report a Missing Item