A Stochastic Frontier Analysis of Financing Constraints on Investment

Hung‐Jen Wang

112 citations0/0 files storedJournal of Business and Economic Statistics

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Financial Analysis and Corporate Governance Working Capital and Financial Performance

Abstract

is shown that investment under financing constraints can be modeled as a one-sided deviation from a frictionless investment level, and that effects of financing constraints can be identified and quantified by imposing a distributional assumption on the effects. Panel data on Taiwanese manufacturing firms between 1989 and 1996 are used in the estimation. It is found that (1) some of the sorting criteria used in the literature do not have significant and monotonic relationships with the degrees of financing constraint, resulting in problematic sample separations, and (2) the effects of financial liberalization in Taiwan are such that the investment efficiency improved over time for a typical firm, and the improvement was particularly large for smaller firms.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 112 citations exist upstream.

References

1977Formulation and estimation of stochastic frontier production function models 1997Do Investment-Cash Flow Sensitivities Provide Useful Measures of Financing Constraints?1995A model for technical inefficiency effects in a stochastic frontier production function for panel data 1988Financing Constraints and Corporate Investment 1987Financing Constraints and Corporate Investment 1997Capital-Market Imperfections and Investment 1994Monetary Policy, Business Cycles, and the Behavior of Small Manufacturing Firms 1988Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data

Cited by

2014Political connections, financing constraints, and the optimization of innovation efficiency among China's private enterprises 2006Are foreign banks always the best? Comparison of state-owned, private and foreign banks in India 2020Effects of diversified openness channels on the total-factor energy efficiency in China's manufacturing sub-sectors: Evidence from trade and FDI spillovers 2015Clean energy use and total-factor efficiencies: An international comparison

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.