Rising technologies, investment and discount rates
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, May, 2020
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| Format: | Thesis |
| Language: | eng |
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Massachusetts Institute of Technology
2020
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| Online Access: | https://hdl.handle.net/1721.1/126972 |
| _version_ | 1811069331430178816 |
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| author | Dernaoui, Zaki. |
| author2 | David Thesmar. |
| author_facet | David Thesmar. Dernaoui, Zaki. |
| author_sort | Dernaoui, Zaki. |
| collection | MIT |
| description | Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, May, 2020 |
| first_indexed | 2024-09-23T08:09:24Z |
| format | Thesis |
| id | mit-1721.1/126972 |
| institution | Massachusetts Institute of Technology |
| language | eng |
| last_indexed | 2024-09-23T08:09:24Z |
| publishDate | 2020 |
| publisher | Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/1269722020-09-04T03:45:54Z Rising technologies, investment and discount rates Dernaoui, Zaki. David Thesmar. Sloan School of Management. Sloan School of Management Sloan School of Management. Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, May, 2020 Cataloged from the official PDF of thesis. Includes bibliographical references (pages 27-29). This paper examines the recent compositional shift in corporate capital and its impact on investment's sensitivity to funding costs. I show that the rising share of intangibles in U.S firms' assets significantly dampens the stimulus effect of interest rate shocks. For a given surprise change to the fed funds rate, a one standard deviation above the mean in intangible capital intensity mutes investment's response by more than 30%. These results hold in robust specifications, when isolating the pure interest rate effect, and controlling for other known factors such as leverage and firm growth. A number of characteristics of intangible capital can potentially explain the heterogeneous responses: collateral value, adjustment costs, project duration and de- preciation rates. I propose a structural interpretation of the empirical findings in a quantitative general equilibrium model of heterogeneous firms. Under a reasonable calibration, the model's insights indicate that the higher depreciation tax shield from intangible capital investment quantitatively plays the main role in driving the results. I present further empirical evidence for this channel by focusing on negative profit firms. by Zaki Dernaoui. S.M. in Management Research S.M.inManagementResearch Massachusetts Institute of Technology, Sloan School of Management 2020-09-03T16:46:21Z 2020-09-03T16:46:21Z 2020 2020 Thesis https://hdl.handle.net/1721.1/126972 1191221877 eng MIT theses may be protected by copyright. Please reuse MIT thesis content according to the MIT Libraries Permissions Policy, which is available through the URL provided. http://dspace.mit.edu/handle/1721.1/7582 45 pages application/pdf Massachusetts Institute of Technology |
| spellingShingle | Sloan School of Management. Dernaoui, Zaki. Rising technologies, investment and discount rates |
| title | Rising technologies, investment and discount rates |
| title_full | Rising technologies, investment and discount rates |
| title_fullStr | Rising technologies, investment and discount rates |
| title_full_unstemmed | Rising technologies, investment and discount rates |
| title_short | Rising technologies, investment and discount rates |
| title_sort | rising technologies investment and discount rates |
| topic | Sloan School of Management. |
| url | https://hdl.handle.net/1721.1/126972 |
| work_keys_str_mv | AT dernaouizaki risingtechnologiesinvestmentanddiscountrates |