Jones Publishes in Comparative Economic Studies

Derek Jones
Derek Jones
Comparative Economic Studies recently published a paper co-authored by Robert D. Morris Professor of Economics Derek Jones titled Corporate Governance and Liquidity Constraints: A Dynamic Analysis. Co-authored by Bersant Hobari and Niels Mygind of the Copenhagen Business School, the study had an advance online publication date of Dec. 3.

The authors used rich panel data for a large and representative sample of Estonian firms to estimate the sensitivity of access to capital to differing ownership structures. This was done through explicitly modeling firm investment behavior in a dynamic setting in the presence of adjustment costs, liquidity constraints and imperfect competition. They estimated Euler equations derived in the presence of symmetric and quadratic adjustment costs and both debt and equity constraints. Generalized Method of Moments estimates confirmed the importance of access to capital in determining investment rates and suggested that firms owned by insiders, especially non-managerial employees, are more prone to be liquidity constrained than others.
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