TY  - JOUR
AU  - Bernstein,Jeffrey I.
AU  - Nadiri,M. Ishaq
TI  - Financing and Investment in Plant and Equipment and Research and Development
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1017
PY  - 1982
Y2  - November 1982
UR  - http://www.nber.org/papers/w1017
L1  - http://www.nber.org/papers/w1017.pdf
N1  - Author contact info:
Jeffrey I. Bernstein
Department of Economics
University Park Campus
Florida International University
11200 S.W. 8th Street
Miami, FL 33199
Tel: 305/348-2592
E-Mail: jeffrey.bernstein@fiu.edu

M. Ishaq Nadiri
Department of Economics
New York University
19 W. 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8968
Fax: 212/995-4013
E-Mail: min1@nyu.edu
AB  - In this stuy a dynamic model of firm behavior is developed which integrates real and financial decisions. The model combines the effects of capital structure and input adjustirent costs on the process of capital accumulation. The existence, uniqueness and stability conditions of the long-run eguilibrium and the dynamic properties of the factor demand are explored. The equations derived from the theoretical model are estimated using firm cross-section time series data. The results indicate that for both Plant and Equipment (P&E) and Research and Development (R&D),the debt-eguity ratio significantly affects the investment demands and the elasticities are highly inelastic. The effect is stronger for P&E than for R&D capital in the long run, while the effects on P&E and R&D investment are quite similar in the short run.
ER  -