Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82866
Authors: 
Jansson, Joakim
Year of Publication: 
2000
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2000:8
Abstract: 
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. <p>
Subjects: 
Corporate finance
Discrete choice
State dependence
JEL: 
C25
C32
Document Type: 
Working Paper

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