Dynamic Corporate Finance is Useful: A Comment on Welch

21 Pages Posted: 30 Dec 2012 Last revised: 14 Apr 2014

Ilya A. Strebulaev

Stanford University - Graduate School of Business; National Bureau of Economic Research

Toni M. Whited

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research

Date Written: February 14, 2013

Abstract

Welch (2013) critiques recent work in dynamic corporate finance. We offer the contrasting view that there is no logical reason to dismiss entire research methodologies, and that many methods can be useful. We explain why dynamic models and structural estimation are useful research tools, as well as why the criticisms of this research paradigm in Welch (2013) are incorrect.

Keywords: Dynamic Corporate Finance

JEL Classification: G30

Suggested Citation

Strebulaev, Ilya A. and Whited, Toni M., Dynamic Corporate Finance is Useful: A Comment on Welch (February 14, 2013). Available at SSRN: https://ssrn.com/abstract=2194680 or http://dx.doi.org/10.2139/ssrn.2194680

Ilya A. Strebulaev

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

HOME PAGE: http://faculty-gsb.stanford.edu/strebulaev/

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Toni M. Whited (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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