The Dynamics of External Financing

Arbeitspapier

A dynamic process underlying firms' discrete financial choices has previously been found, but without controlling for unobserved heterogeneity, this dependence can either be of a true nature or an effect of firm-specific characteristics that we cannot observe. This study extends previous research focusing on firms' discrete external financing decision by adapting a model by Honoré and Kyriazidou (2000), which accommodates both fixed effects and a lagged dependent variable, which makes it possible to establish the nature of the dependence. We find that there is a smoothing of financing, even after controlling for unobserved heterogeneity, and also that unobserved heterogeneity plays a significant explanatory role.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2000:8

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
• Subject: Corporate finance ; Discrete choice ; State dependence ; Fremdkapital ; Unternehmensfinanzierung ; Schweden

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jansson, Joakim
• Event: Veröffentlichung
• (who): Uppsala University, Department of Economics
• (where): Uppsala
• (when): 2000

Further information

• Handle: http://hdl.handle.net/10419/82866
• Last update: 10.03.2025, 11:43 AM CET