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This paper investigates investment and output dynamics in a simple continuous time setting, showing that financing constraints substantially alter the relationship between net worth and the decisions of an optimizing firm. In...

cash flow management corporate prudential risk the financial accelerator Financial Distress induced risk aversion liquidity constraints liquidity risk macroeconomic propagation multiperiod financial management non-linear macroeconomic modelling Tobin’s q precautionary savings

Financial distress is the stage of declining financial condition that occurs in a company prior to bankruptcy or liquidation (Platt & Platt 2002). The company can get out of this financial difficulty if the company has a...

Managerial Ownership Profitability Ratio Leverage Ratio Financial Distress None