Investment and finance decisions with taxation, bankruptcy and non-convex costs of adjustment.

摘要

This dissertation presents a model of firms' financing and investment behavior and three applications of the model to economic problems. In the model, investment and financing are jointly determined, and taxes, bankruptcy and non-convex costs of real and financial adjustment are explicitly considered. The first chapter documents firms' 'Financial Lumpiness', the fact that issues and repurchases of debt and equity are large but infrequent events. It then shows that investment lumpiness is not the source of this feature of financial behavior. Over time, even as the capital stock stays unaltered, the changing profitability of firms implies they would engage in frequent financial actions in the absence of non-convex costs of financial adjustment.; The model also rationalizes the convex region in the empirical estimates of investment as a function of 'mandated investment', predicts and shows evidence of 'overadjustment' upon firms' capital structure adjustments, and of periods of contemporaneous cash accumulation and external financing. Finally, it shows that heterogeneity in firms' permanent growth rate rationalizes the well known finding of investment's cash-flow sensitivity.; The second chapter documents that firms in high growth industries are, on average, less leveraged that firms in low growth industries: a 1% higher rate of growth predicts a 0.96% lower market leverage and a 0.45% lower book leverage ratio and that this negative relationship is robust only for a small range of growth rates. Then it shows that permanent differences in a firm's growth rate imply a positive rather than a negative growth leverage relationship, but that temporary growth shocks are able to rationalize the firm's behavior.; The third chapter analyzes the behavior of firms during the period 2001-2006. This period has seen important changes in corporate and personal taxes, low economic growth, along with high liquid asset accumulation, low investment, and high equity payout ratios. The chapter shows the predicted response of firms to a tax change under the assumptions of chapter one is not consistent with empirical data, but that the high cash accumulation, high dividend payments and low investment of firms can be rationalized as the optimal response of firms to a temporary growth slowdown.