CONDITIONAL INVESTMENT-CASH FLOW SENSITIVITIES AND FINANCING CONSTRAINTS
We study the sensitivity of investment to cash flow conditional on measures of q in an adjustment costs framework with costly external finance. We present a benchmark model in which this conditional investment–cash flow sensitivity increases monotonically with the cost premium for external finance, for firms in a financially constrained regime. Using simulated data, we show that this pattern is found in linear regressions that relate investment rates to measures of both cash flow and average q. We also derive a structural equation for investment from the first-order conditions of our model, and show that this can be estimated directly.
Taking the BOT project of Chongquin Fuling Lidu Bridge as example,this paper discusses key links needing attention during BOT investment choice,contract signing and construction management.Some important points are summarized in this paper for successful executing BOT project.This paper can be referenced by investors in related building industries.