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Empirical Tests of Crowding Show Strong Evidence for Crowding Out

question 116

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Empirical tests of crowding show strong evidence for crowding out.


Definitions:

Mandated Projects

Projects that are required by legal or regulatory requirements, often for compliance with laws, regulations, or because of safety and welfare concerns.

Flotation Cost

Flotation cost refers to the total expenses incurred by a company in issuing new securities, including underwriting, legal, registration, and other associated fees.

Debt-Equity Ratio

An indicator of a corporation's use of debt financing, determined by dividing its overall debts by the equity of its shareholders.

External Financing

Funds a business obtains from outside the company, including loans, equity investments, and other financial instruments.

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