This article discusses the relationship between financial leverage and firm investment. Specifically, the amount of financial leverage that controlling owners have in a firm’s portfolio affects its capital investment decisions. Publicly traded firms benefit from high financial leverage, while privately held firms benefit from low financial leverage. This study highlights the important role of financial exposure in the decision-making process of firms. Further, the relationship between firm investment and credit quality is positive. However, it is not clear whether credit quality influences firm performance.
This article investigates whether the returns to training in formal jobs are positive for firms in underdeveloped countries. The authors use a panel of large firms with detailed data on their workforce, output, and capital stock. The authors find that the return to formal job training varies considerably across firms, but it is clear that this type of investment is profitable for many firms. While the observed returns are not large, they are higher than those of physical capital. It is important to note, however, that the observed returns to formal job training are relatively small.
The authors also examine whether formal job training has a positive impact on firm investment. They use a panel of large firms that have detailed information on their training, output, and workforce, as well as their capital stock. They find that the return to formal job training is negative. However, they note that it is positive when compared to the returns to physical capital. In addition, they find that the amount of formal job training in a firm’s workforce is lower than the returns to physical capital.
Although this study focuses on the return to formal job training, it is important to note that a large firm’s training can have a significant positive impact on the investment decisions of smaller firms. The authors’ panel contains detailed data on the workforce, capital stock, and output of the firm. These results suggest that formal job training is a good investment for many firms. Interestingly, the observed amounts of formal job training are not significantly greater than the returns to physical capital.
The authors also find that the return to formal job training varies significantly between firms. In some cases, the returns to formal job training are higher than those of physical capital. Nonetheless, the authors note that small firms are not necessarily more efficient than large ones in acquiring new skills. They note that there is a strong relationship between misvaluation and investment, which may be the cause of poor performance. A small firm will benefit more from investments when it is financed with debt.
In the United States, the authors’ findings are consistent with their theory of economic competition. Using the panel of large firms as the basis for their analysis, they find that the returns to formal job training are higher than those to physical capital in countries with less developed financial systems. In addition, they find that larger firms are more likely to receive government funds than small firms. In these cases, small firms must develop their own sources of financing. There are no alternative sources of finance in these countries, but they are often underfunded.