The role of non-convex costs in firms' investment and financial dynamics

This paper shows that non-convex costs of financial adjustment are quantitatively relevant for explaining firm dynamics. First, empirically, financial activity is lumpy, more than investment activity. Second, non-convex costs are necessary, in the context of a dynamic investment and financing model,...

Ausführliche Beschreibung

Gespeichert in:

Bibliographische Detailangaben
Veröffentlicht in:	Journal of economic dynamics & control 2013-05, Vol.37 (5), p.929-950
1. Verfasser:	Bazdresch, Santiago
Format:	Artikel
Sprache:	eng
Schlagworte:	Cost analysis Dynamic trade-off model Economic dynamics Economic models Economic theory Experimental methods External financing costs Financial economics Financial frictions Financial lumpiness Financing Investment Investment analysis Investment policy Personal finance Studies
Online-Zugang:	Volltext
Tags:	Tag hinzufügen Keine Tags, Fügen Sie den ersten Tag hinzu!

container_end_page	950
container_issue	5
container_start_page	929
container_title	Journal of economic dynamics & control
container_volume	37
creator	Bazdresch, Santiago
description	This paper shows that non-convex costs of financial adjustment are quantitatively relevant for explaining firm dynamics. First, empirically, financial activity is lumpy, more than investment activity. Second, non-convex costs are necessary, in the context of a dynamic investment and financing model, to rationalize this lumpiness. Two versions of the model, with and without non-convex costs, are compared. Only the non-convex costs version replicates the dynamics in the data, generating financial lumpiness higher than investment lumpiness. Other predictions of the model with respect to investment and finance are discussed.
doi_str_mv	10.1016/j.jedc.2013.01.002
format	Article
fullrecord	<record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_miscellaneous_1355852074</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><els_id>S0165188913000109</els_id><sourcerecordid>1355852074</sourcerecordid><originalsourceid>FETCH-LOGICAL-c425t-af45764e84c15353e66f098a5cfc6f5292267ce737174c26e330b7aebe7dc42f3</originalsourceid><addsrcrecordid>eNp9kE9LAzEQxYMoWKtfwNOCB73smj-bTRa8SFErFLzUc0izE8yym9RkW_Tbm1JPHjzNMPze8N5D6JrgimDS3PdVD52pKCaswqTCmJ6gGZGiLYmo2SmaZYiXRMr2HF2k1GOMOeVkhpbrDyhiGKAItvDBlyb4PXwVJqQpFc4X1sUx3eZtD2kawU-F9l2-eu2N00PRfXs9OpMu0ZnVQ4Kr3zlH789P68WyXL29vC4eV6WpKZ9KbWsumhpkbQhnnEHTWNxKzY01jeW0pbQRBgQT2bihDTCGN0LDBkSXP1g2R3fHv9sYPnfZkxpdMjAM2kPYJUUY55JTnGPP0c0ftA-76LO7TBHZshoLmSl6pEwMKUWwahvdqOO3IlgdylW9OpSrDuUqTFQuN4sejiLIUfcOokrGgTfQuQhmUl1w_8l_AIJtgSI</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>1318934078</pqid></control><display><type>article</type><title>The role of non-convex costs in firms' investment and financial dynamics</title><source>Elsevier ScienceDirect Journals</source><creator>Bazdresch, Santiago</creator><creatorcontrib>Bazdresch, Santiago</creatorcontrib><description>This paper shows that non-convex costs of financial adjustment are quantitatively relevant for explaining firm dynamics. First, empirically, financial activity is lumpy, more than investment activity. Second, non-convex costs are necessary, in the context of a dynamic investment and financing model, to rationalize this lumpiness. Two versions of the model, with and without non-convex costs, are compared. Only the non-convex costs version replicates the dynamics in the data, generating financial lumpiness higher than investment lumpiness. Other predictions of the model with respect to investment and finance are discussed.</description><identifier>ISSN: 0165-1889</identifier><identifier>EISSN: 1879-1743</identifier><identifier>DOI: 10.1016/j.jedc.2013.01.002</identifier><identifier>CODEN: JEDCDH</identifier><language>eng</language><publisher>Amsterdam: Elsevier B.V</publisher><subject>Cost analysis ; Dynamic trade-off model ; Economic dynamics ; Economic models ; Economic theory ; Experimental methods ; External financing costs ; Financial economics ; Financial frictions ; Financial lumpiness ; Financing ; Investment ; Investment analysis ; Investment policy ; Personal finance ; Studies</subject><ispartof>Journal of economic dynamics & control, 2013-05, Vol.37 (5), p.929-950</ispartof><rights>2013 Elsevier B.V.</rights><rights>Copyright Elsevier Sequoia S.A. May 2013</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c425t-af45764e84c15353e66f098a5cfc6f5292267ce737174c26e330b7aebe7dc42f3</citedby><cites>FETCH-LOGICAL-c425t-af45764e84c15353e66f098a5cfc6f5292267ce737174c26e330b7aebe7dc42f3</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktohtml>$$Uhttps://www.sciencedirect.com/science/article/pii/S0165188913000109$$EHTML$$P50$$Gelsevier$$H</linktohtml><link.rule.ids>314,776,780,3537,27903,27904,65309</link.rule.ids></links><search><creatorcontrib>Bazdresch, Santiago</creatorcontrib><title>The role of non-convex costs in firms' investment and financial dynamics</title><title>Journal of economic dynamics & control</title><description>This paper shows that non-convex costs of financial adjustment are quantitatively relevant for explaining firm dynamics. First, empirically, financial activity is lumpy, more than investment activity. Second, non-convex costs are necessary, in the context of a dynamic investment and financing model, to rationalize this lumpiness. Two versions of the model, with and without non-convex costs, are compared. Only the non-convex costs version replicates the dynamics in the data, generating financial lumpiness higher than investment lumpiness. Other predictions of the model with respect to investment and finance are discussed.</description><subject>Cost analysis</subject><subject>Dynamic trade-off model</subject><subject>Economic dynamics</subject><subject>Economic models</subject><subject>Economic theory</subject><subject>Experimental methods</subject><subject>External financing costs</subject><subject>Financial economics</subject><subject>Financial frictions</subject><subject>Financial lumpiness</subject><subject>Financing</subject><subject>Investment</subject><subject>Investment analysis</subject><subject>Investment policy</subject><subject>Personal finance</subject><subject>Studies</subject><issn>0165-1889</issn><issn>1879-1743</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2013</creationdate><recordtype>article</recordtype><recordid>eNp9kE9LAzEQxYMoWKtfwNOCB73smj-bTRa8SFErFLzUc0izE8yym9RkW_Tbm1JPHjzNMPze8N5D6JrgimDS3PdVD52pKCaswqTCmJ6gGZGiLYmo2SmaZYiXRMr2HF2k1GOMOeVkhpbrDyhiGKAItvDBlyb4PXwVJqQpFc4X1sUx3eZtD2kawU-F9l2-eu2N00PRfXs9OpMu0ZnVQ4Kr3zlH789P68WyXL29vC4eV6WpKZ9KbWsumhpkbQhnnEHTWNxKzY01jeW0pbQRBgQT2bihDTCGN0LDBkSXP1g2R3fHv9sYPnfZkxpdMjAM2kPYJUUY55JTnGPP0c0ftA-76LO7TBHZshoLmSl6pEwMKUWwahvdqOO3IlgdylW9OpSrDuUqTFQuN4sejiLIUfcOokrGgTfQuQhmUl1w_8l_AIJtgSI</recordid><startdate>20130501</startdate><enddate>20130501</enddate><creator>Bazdresch, Santiago</creator><general>Elsevier B.V</general><general>Elsevier Sequoia S.A</general><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>20130501</creationdate><title>The role of non-convex costs in firms' investment and financial dynamics</title><author>Bazdresch, Santiago</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c425t-af45764e84c15353e66f098a5cfc6f5292267ce737174c26e330b7aebe7dc42f3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2013</creationdate><topic>Cost analysis</topic><topic>Dynamic trade-off model</topic><topic>Economic dynamics</topic><topic>Economic models</topic><topic>Economic theory</topic><topic>Experimental methods</topic><topic>External financing costs</topic><topic>Financial economics</topic><topic>Financial frictions</topic><topic>Financial lumpiness</topic><topic>Financing</topic><topic>Investment</topic><topic>Investment analysis</topic><topic>Investment policy</topic><topic>Personal finance</topic><topic>Studies</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Bazdresch, Santiago</creatorcontrib><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Journal of economic dynamics & control</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Bazdresch, Santiago</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>The role of non-convex costs in firms' investment and financial dynamics</atitle><jtitle>Journal of economic dynamics & control</jtitle><date>2013-05-01</date><risdate>2013</risdate><volume>37</volume><issue>5</issue><spage>929</spage><epage>950</epage><pages>929-950</pages><issn>0165-1889</issn><eissn>1879-1743</eissn><coden>JEDCDH</coden><abstract>This paper shows that non-convex costs of financial adjustment are quantitatively relevant for explaining firm dynamics. First, empirically, financial activity is lumpy, more than investment activity. Second, non-convex costs are necessary, in the context of a dynamic investment and financing model, to rationalize this lumpiness. Two versions of the model, with and without non-convex costs, are compared. Only the non-convex costs version replicates the dynamics in the data, generating financial lumpiness higher than investment lumpiness. Other predictions of the model with respect to investment and finance are discussed.</abstract><cop>Amsterdam</cop><pub>Elsevier B.V</pub><doi>10.1016/j.jedc.2013.01.002</doi><tpages>22</tpages></addata></record>
fulltext	fulltext
identifier	ISSN: 0165-1889
ispartof	Journal of economic dynamics & control, 2013-05, Vol.37 (5), p.929-950
issn	0165-1889 1879-1743
language	eng
recordid	cdi_proquest_miscellaneous_1355852074
source	Elsevier ScienceDirect Journals
subjects	Cost analysis Dynamic trade-off model Economic dynamics Economic models Economic theory Experimental methods External financing costs Financial economics Financial frictions Financial lumpiness Financing Investment Investment analysis Investment policy Personal finance Studies
title	The role of non-convex costs in firms' investment and financial dynamics
url	https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-01-28T00%3A12%3A23IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=The%20role%20of%20non-convex%20costs%20in%20firms'%20investment%20and%20financial%20dynamics&rft.jtitle=Journal%20of%20economic%20dynamics%20&%20control&rft.au=Bazdresch,%20Santiago&rft.date=2013-05-01&rft.volume=37&rft.issue=5&rft.spage=929&rft.epage=950&rft.pages=929-950&rft.issn=0165-1889&rft.eissn=1879-1743&rft.coden=JEDCDH&rft_id=info:doi/10.1016/j.jedc.2013.01.002&rft_dat=%3Cproquest_cross%3E1355852074%3C/proquest_cross%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=1318934078&rft_id=info:pmid/&rft_els_id=S0165188913000109&rfr_iscdi=true