This book studies the effects of leverage on investment efficiency in Swedish listed firms 1997-2005. The effects are studied separately for over- and underinvesting firms. To measure investment efficiency we employ three different measures: marginal q, absolute investments (defined as capital expenditures plus research and development expenditures) and Tobins Q. The application of three different investment efficiency measures is one of the main contributions of this study. The investment efficiency of overinvesting firms was hypothesized to be improved by higher leverage. The results based...