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Aggregate investment and corporate indebtedness , Some empirical avidence from Finland

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  • Kajanoja, Lauri

Abstract

The purpose of this study was to examine whether evidence of the possible effects of firms' indebtedness on their investment decisions can be found in empirical aggregate investment equations. Three different types of equations for aggregate investment in Finland were estimated.The equations were estimated separately for manufacturing and nonmanufacturing investment.An indebtedness variable was used as an additional explanatory variable in every equation.The results support the view that nonmanufacturing firms' indebtedness has had a negative effect on their investment in Finland.In the manufacturing sector no such evidence was found.

Suggested Citation

  • Kajanoja, Lauri, 1995. "Aggregate investment and corporate indebtedness , Some empirical avidence from Finland," Bank of Finland Research Discussion Papers 10/1995, Bank of Finland.
    • Handle: RePEc:zbw:bofrdp:rdp1995_010
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    References listed on IDEAS

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    1. Chirinko, Robert S, 1993. "Business Fixed Investment Spending: Modeling Strategies, Empirical Results, and Policy Implications," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1875-1911, December.
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    3. R. Glenn Hubbard & Anil K. Kashyap & Toni M. Whited, 1993. "Internal Finance and Firm Investment," NBER Working Papers 4392, National Bureau of Economic Research, Inc.
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    5. Viaene, Jean-Marie & Zilcha, Itzhak, 1995. "Multiple uncertainty, forward-futures markets and international trade," Discussion Papers, Series II 255, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    6. repec:zbw:bofrdp:1995_003 is not listed on IDEAS
    7. Viaene, Jean-Marie & Zilcha, Itzhak, 1995. "Multiple uncertainty, forward-futures markets and international trade," Bank of Finland Research Discussion Papers 3/1995, Bank of Finland.
    8. Barro, Robert J, 1990. "The Stock Market and Investment," The Review of Financial Studies, Society for Financial Studies, vol. 3(1), pages 115-131.
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