Front Matter Page
Fiscal Affairs Department
Contents
I. Introduction
II. Selected Literature Review
A. Public Investment Multipliers
B. Corporate Investment and the Strength of Firms’ Balance Sheet
III. Data and Methodology
A. Balance Sheet Data
B. Econometric Strategy
IV. Econometric Results
A. First Approach: Public Investment Growth Shock
B. Second Approach: Public Investment Forecast Errors Shock
V. Conclusion and Policy Implications
References
VI. Appendix
Figures
Figure 1. Linear Effect on Public Investment on Private Firms’ Net Investment Rates
Figure 2. Private Investment, Public Investment, and Corporate Debt
Figure 3. Net investment Rates and Leverage
Figure 4. Non-linear Effect of Leverage on Private Firms’ Net Investment Rates
Figure 5. Financially Constrained Firms by Sector
Figure 6. Net Investment Rates and Financial Constraints
Figure 7. Non-linear Effect of Financial Constraints on Corporate’ Net Investment Rates
Figure 8. Effect of Public Investment on Private Firms’ Net Investment
Figure 9. Linear Effect of Public Investment Shock on Private Firms’ Net Investment
Figure 10. Non-linear Effect of Leverage on Private Firms’ Net Investment Rates
Figure 11. Financial Constraints Index
Figure 12. Non-linear Effect of Financial Constraints on Corporate’ Net Investment Rates