Firms investment and finance decisions : theory and empirical methodology This book provides coherent theoretical and empirical analysis of firms investment and financing decisions. It assesses the role of uncertainty financial imperfections corporate governance and taxation. Evidence is obtained using several unique and high quality microeconomic data sets which explore features seldom addressed. Overall the empirical results confirm theoretical precedents. Some firms are indeed financially constrained for fixed investment as well as for R&D projects. The free cash flow hypothesis holds that is managers divert excess funds away for their own interests but less so in closely controlled companies. In accordance with the real option theory the results suggest that uncertainty leads firms to adopt a wait and see strategy which eventually reduces investment especially for irreversible investment. Corporate governance features are shown to affect managers discipline and companies restructuring plans. Finally different tax reforms are evaluated and an alternative tax structure that would stimulate growth is proposed. Scholars including those with an interest in microeconomics and econometrics and staff within central banks and national and international organisations will also find the book of interest as will policymakers and decision makers concerned with the role of financing corporate governance and taxation on firms decisions