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Lookup NU author(s): Dr Fabrizio Casalin
We use a simple model of investment and external finance to analyze the relationship among the issuance of securities, financial market valuations and, alternatively, aggregate investment or cash flows. We find that issuance is driven by market valuations, and does not influence aggregate investment, whereas investment has a negative impact on equity issuance. Moreover, we obtain widespread evidence that equity and debt are complementary sources of finance, and that positive shocks to cash flows are associated with larger issuance of debt.
Author(s): Dia E, Casalin F
Publication type: Article
Publication status: Published
Journal: Economics Bulletin
Year: 2013
Volume: 33
Issue: 3
Pages: 1751-1761
Print publication date: 11/07/2013
Date deposited: 12/07/2013
ISSN (electronic): 1545-2921
Publisher: Economics Bulletin
URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I3-P164.pdf