Methods on Economy - Research Proposal Example

Download file to see previous pages... As the report declars the variables selected for analysis are Investments, Assets, Liabilities, Debt, Equity, and Earnings per share, Return on Assets, Return on Investment, Asset Turnover, Current Ratio, Quick ratio. Each country is analyzed for each variable separately using time series analysis. The interpretation for each measure of performance is explained. The limitations of the study are listed.As the discussion stresses economic liberalization and globalization have brought about a new and competitive environment for the common and small investors who are willing to participate in the equity of the corporate sector in our country. Understanding the firm’s investment decisions under imperfect market conditions is one of the central issues of the financial economics. Studying firm’s investment in such environment can provide insight into the dynamics of its growth as a function of internal and external financial sources. In the presence of financing constraints the firm’s investment vary not only with the availability of the profitable investment projects, but also with the internal funds. Consequently, the severity of the financing constraints is proposed to be measured by the magnitude of the cash flow sensitivity of investment. In this paper, the authors propose an alternative perspective to investigate the relationship between financing conditions and the sensitivity measure.  The paper concludes by stating that financing conditions may determine investment and growth of the European Firms. ...Download file to see next pagesRead More