Investments and capital market imperfections, identification issues: a survey
If financial markets are perfect, the choice of the sources of finance does not influence investment decisions. However, financial markets are considered to be far from perfect. This review concentrates on the role of information asymmetry in determining real investment decisions. Despite the theore...
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| Format: | Article |
| Language: | English |
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Institute of Public Finance
2010-12-01
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| Series: | Financial Theory and Practice |
| Subjects: | |
| Online Access: | http://www.ijf.hr/eng/FTP/2010/4/coric.pdf |
| _version_ | 1818839081569746944 |
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| author | Bruno Ćorić |
| author_facet | Bruno Ćorić |
| author_sort | Bruno Ćorić |
| collection | DOAJ |
| description | If financial markets are perfect, the choice of the sources of finance does not influence investment decisions. However, financial markets are considered to be far from perfect. This review concentrates on the role of information asymmetry in determining real investment decisions. Despite the theoretical plausibility of a relationship between capital market imperfections and real investments, the empirical literature has found it difficult to identify this channel. Overall, more research is needed to identify a method that will not be subject to criticisms related to the use of cash-flow in the investment equation and will be based on the data that are relatively available across countries and over time. |
| first_indexed | 2024-12-19T03:48:37Z |
| format | Article |
| id | doaj.art-a714ae46e6844621a2b4c750a03efaca |
| institution | Directory Open Access Journal |
| issn | 1846-887X 1845-9757 |
| language | English |
| last_indexed | 2024-12-19T03:48:37Z |
| publishDate | 2010-12-01 |
| publisher | Institute of Public Finance |
| record_format | Article |
| series | Financial Theory and Practice |
| spelling | doaj.art-a714ae46e6844621a2b4c750a03efaca2022-12-21T20:37:04ZengInstitute of Public FinanceFinancial Theory and Practice1846-887X1845-97572010-12-01344407434Investments and capital market imperfections, identification issues: a surveyBruno ĆorićIf financial markets are perfect, the choice of the sources of finance does not influence investment decisions. However, financial markets are considered to be far from perfect. This review concentrates on the role of information asymmetry in determining real investment decisions. Despite the theoretical plausibility of a relationship between capital market imperfections and real investments, the empirical literature has found it difficult to identify this channel. Overall, more research is needed to identify a method that will not be subject to criticisms related to the use of cash-flow in the investment equation and will be based on the data that are relatively available across countries and over time.http://www.ijf.hr/eng/FTP/2010/4/coric.pdfinvestmentasymmetric informationcapital markets imperfections |
| spellingShingle | Bruno Ćorić Investments and capital market imperfections, identification issues: a survey Financial Theory and Practice investment asymmetric information capital markets imperfections |
| title | Investments and capital market imperfections, identification issues: a survey |
| title_full | Investments and capital market imperfections, identification issues: a survey |
| title_fullStr | Investments and capital market imperfections, identification issues: a survey |
| title_full_unstemmed | Investments and capital market imperfections, identification issues: a survey |
| title_short | Investments and capital market imperfections, identification issues: a survey |
| title_sort | investments and capital market imperfections identification issues a survey |
| topic | investment asymmetric information capital markets imperfections |
| url | http://www.ijf.hr/eng/FTP/2010/4/coric.pdf |
| work_keys_str_mv | AT brunocoric investmentsandcapitalmarketimperfectionsidentificationissuesasurvey |