Investment Models: Methodology and Results

Vol. 22 No. 1 (2002)

Jan-Mar / 2002
Published January 1, 2002
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Casagrande, Elton Eustaqui. 2002. “Investment Models: Methodology and Results”. Brazilian Journal of Political Economy 22 (1):101-12.

Investment Models: Methodology and Results

Elton Eustaqui Casagrande
Professor do Departamento de Economia da Unesp — Campus Araraquara — SP.
Brazilian Journal of Political Economy, Vol. 22 No. 1 (2002), Jan-Mar / 2002, Pages 101-112


This paper provides an overview of the empirical studies on corporate financing patterns and firm’s investment behavior. In a frictionless world the Modigliani-Miller theorem holds as well as the neoclassical investment theory. However, in presence of imperfections resulting from information asymmetries internal finance is often less costly than external finance. The goal in this article is to show how empirical studies have examined the role of financial constraints and firm’s investment behavior.

JEL Classification: G31.

Keywords: Investment asymmetry liquidity financing