IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v15y2008i8p577-581.html
   My bibliography  Save this article

Investment, financing constraints and profit expectations: new macro evidence

Author

Listed:
  • Gabe de Bondt
  • Marie Diron

Abstract

Regression results show that the external financing costs, the financing gap and profit expectations significantly matter for US and euro area aggregate (nonconstruction) investment. This finding supports the view that external and internal financing constraints hamper investment also at the macro level.

Suggested Citation

  • Gabe de Bondt & Marie Diron, 2008. "Investment, financing constraints and profit expectations: new macro evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 15(8), pages 577-581.
  • Handle: RePEc:taf:apeclt:v:15:y:2008:i:8:p:577-581
    DOI: 10.1080/13504850600722088
    as

    Download full text from publisher

    File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/13504850600722088&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/13504850600722088?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Vlieghe, Gertjan & Stephen Bond & Alexander Klemm & Rain Newton-Smith & Murtaza Syed, 2003. "The roles of expected profitability, Tobin's Q and cash flow in econometric models of company investment," Royal Economic Society Annual Conference 2003 212, Royal Economic Society.
    2. Angeloni,Ignazio & Kashyap,Anil K. & Mojon,Benoît (ed.), 2003. "Monetary Policy Transmission in the Euro Area," Cambridge Books, Cambridge University Press, number 9780521828642, November.
    3. Aggarwal, Raj & Zong, Sijing, 2006. "The cash flow-investment relationship: International evidence of limited access to external finance," Journal of Multinational Financial Management, Elsevier, vol. 16(1), pages 89-104, February.
    4. Marie Diron & Maria Cruz Manzano & Thomas Westermann, 2005. "Forecasting aggregate investment in the euro area: do indicators of financial conditions help?," BIS Papers chapters, in: Bank for International Settlements (ed.), Investigating the relationship between the financial and real economy, volume 22, pages 206-27, Bank for International Settlements.
    5. Louis Bê Duc & Gabe de Bondt & Alessandro Calza & David Marqués Ibáñez & Adrian van Rixtel & Silvia Scopel, 2005. "Financing conditions in the euro area," Occasional Paper Series 37, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fabio Bacchini & Maria Elena Bontempi & Roberto Golinelli & Cecilia Jona-Lasinio, 2014. "ICT and Non-ICT investments: short and long run macro dynamics," Working Papers LuissLab 14113, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    2. Fabio Bacchini & Maria Elena Bontempi & Roberto Golinelli & Cecilia Jona-Lasinio, 2018. "Short- and long-run heterogeneous investment dynamics," Empirical Economics, Springer, vol. 54(2), pages 343-378, March.
    3. Saltari, E. & Travaglini, G., 2012. "A note on optimal capital stock and financing constraints," Economic Modelling, Elsevier, vol. 29(4), pages 1177-1180.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Mizen & Cihan Yalcin, 2006. "Monetary Policy, Corporate Financial Composition and Real Activity," CESifo Economic Studies, CESifo Group, vol. 52(1), pages 177-213, March.
    2. Guariglia, Alessandra & Mateut, Simona, 2006. "Credit channel, trade credit channel, and inventory investment: Evidence from a panel of UK firms," Journal of Banking & Finance, Elsevier, vol. 30(10), pages 2835-2856, October.
    3. Manzur Quader & Karl Taylor, 2018. "Corporate efficiency, credit status and investment," The European Journal of Finance, Taylor & Francis Journals, vol. 24(6), pages 439-457, April.
    4. Zsolt Darvas, 2013. "Monetary transmission in three central European economies: evidence from time-varying coefficient vector autoregressions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(2), pages 363-390, May.
    5. Marc Flandreau & Mathilde Maurel, 2005. "Monetary Union, Trade Integration, and Business Cycles in 19th Century Europe," Open Economies Review, Springer, vol. 16(2), pages 135-152, April.
    6. Nick Bloom & Stephen Bond & John Van Reenen, 2007. "Uncertainty and Investment Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(2), pages 391-415.
    7. Eric Jondeau & Jean-Guillaume Sahuc, 2005. "Testing Heterogeneity within the Euro Area Using a Structural Multi-Country Model," Documents de recherche 05-06, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    8. Jérôme Héricourt & Iuliana Matei, 2007. "Transmission de la politique monétaire dans les pays d'E urope centrale et orientale : que savons-nous vraiment ?," Economie & Prévision, La Documentation Française, vol. 0(4), pages 221-238.
    9. Bouvatier, Vincent & Lepetit, Laetitia, 2008. "Banks' procyclical behavior: Does provisioning matter?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 18(5), pages 513-526, December.
    10. Ester Faia, 2007. "Financial Differences and Business Cycle Co‐Movements in a Currency Area," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(1), pages 151-185, February.
    11. Lips, Johannes, 2018. "Debt and the Oil Industry - Analysis on the Firm and Production Level," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181504, Verein für Socialpolitik / German Economic Association.
    12. G. Peersman & W. Wagner, 2014. "Shocks to Bank Lending, Risk-Taking, Securitization, and their Role for U.S. Business Cycle Fluctuations," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 14/874, Ghent University, Faculty of Economics and Business Administration.
    13. Georgios P. Kouretas & Chris Tsoumas, 2013. "Bank Risk-Taking in CEE Countries," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 5(2), pages 103-123, June.
    14. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h560mit97 is not listed on IDEAS
    15. Athanasios L. Athanasenas & Constantinos Katrakilidis, 2008. "An Eclectic Causality Model for Income Growth: Evidence from Greece," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 31-46.
    16. Domenico Giannone & Michele Lenza & Lucrezia Reichlin, 2010. "Business Cycles in the Euro Area," NBER Chapters, in: Europe and the Euro, pages 141-167, National Bureau of Economic Research, Inc.
    17. Caggese, Andrea, 2007. "Testing financing constraints on firm investment using variable capital," Journal of Financial Economics, Elsevier, vol. 86(3), pages 683-723, December.
    18. Maarten Dossche, 2009. "Understanding Inflation Dynamics.Where Do We Stand?," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(2), pages 209-227.
    19. Quader, Syed Manzur, 2017. "Differential effect of liquidity constraints on firm growth," Review of Financial Economics, Elsevier, vol. 32(C), pages 20-29.
    20. Sylvia Frühwirth‐Schnatter & Sylvia Kaufmann, 2006. "How do changes in monetary policy affect bank lending? An analysis of Austrian bank data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(3), pages 275-305, April.
    21. Gabriele Angori & David Aristei, 2020. "Heterogeneity and state dependence in firms’ access to credit: Microevidence from the euro area," SEEDS Working Papers 0220, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Feb 2020.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:15:y:2008:i:8:p:577-581. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.