Download or read book Investment Cash Flow Sensitivity and Financing Constraints written by Rejie George and published by . This book was released on 2012 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: A controversy exists on the use of the investment ndash; cash flow sensitivity as a measure of financing constraints of firms. We re-examine this controversy by analyzing firms affiliated to Indian business groups. We find a strong investment ndash; cash flow sensitivity for both group-affiliated and independent firms, but no significant difference in the sensitivity between them. Additional tests consistently demonstrate that investment ndash; cash flow sensitivity of Indian group affiliated firms is not significantly lower relative to unaffiliated firms.
Download or read book Is Investment Cash Flow Sensitivity a Good Measure of Financing Constraints written by Rejie George and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Investment cash Flow Sensitivities Credit Rationing and Financing Constraints written by and published by . This book was released on 2008 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Investment cash Flow Sensitivities are Not Valid Measures of Financing Constraints written by Steven N. Kaplan and published by . This book was released on 2000 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: Kaplan and Zingales [1997] provide both theoretical arguments and empirical evidence that investment-cash flow sensitivities are not good indicators of financing constraints. Fazzari, Hubbard and Petersen [1999] criticize those findings. In this note, we explain how the Fazzari et al. [1999] criticisms are either very supportive of the claims in Kaplan and Zingales [1997] or incorrect. We conclude with a discussion of unanswered questions.
Download or read book On the Relationship Between the Investment cash Flow Sensitivity and the Degree of Financing Constraints written by and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Do Financing Constraints Explain Why Investment is Correlated with Cash Flow written by Steven N. Kaplan and published by . This book was released on 2008 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the sources of the correlation between corporate cash flow and investment by undertaking an in-depth analysis of the 49 low-dividend firms identified by Fazzari, Hubbard, and Petersen (1988) as having an unusually high investment-cash flow sensitivity. We find that in only 15% of firm-years is there some question as to a firm's ability to access internal or external funds to increase investment. Strikingly, those firms that appear less financially constrained exhibit a significantly greater investment- cash flow sensitivity than firms that appear more financially constrained. We find this pattern for the entire sample period, for sub-periods, and for individual years. The results indicate that a higher sensitivity cannot be interpreted as evidence that a firm is more financially constrained. We discuss reasons and provide evidence why the opposite may be true. These findings challenge much of the existing evidence on the effects of financial constraints.
Download or read book Using Investment cash Flow Sensitivity to Test for Financing Constraints written by Guiying Wu and published by . This book was released on 2006 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Asymmetric Effects of the Financial Crisis written by Mr.Vadim Khramov and published by International Monetary Fund. This book was released on 2012-04-01 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper uses the financial crisis of 2008 as a natural experiment to demonstrate that when measuring investment-cash flow sensitivity, the value of a firm's assets that can be used as collateral should be taken into account. Using panel data on U.S. firms from 1990 to 2011, it was found that the share of physical capital in assets has a strong influence on investment-cash flow sensitivity, which decreased substantially after the crisis when banks changed their expectations about the value of assets on firms' balance sheets. This paper deepens our understanding of firms' investment behavior.
Download or read book Do Financing Constraints Explain why Investment is Correlated with Cash Flow written by Steven N. Kaplan and published by . This book was released on 1995 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the sources of the correlation between corporate cash flow and investment by undertaking an in-depth analysis of the 49 low-dividend firms identified by Fazzari, Hubbard, and Petersen (1988) as having an unusually high investment-cash flow sensitivity. We find that in only 15% of firm-years is there some question as to a firm's ability to access internal or external funds to increase investment. Strikingly, those firms that appear less financially constrained exhibit a significantly greater investment- cash flow sensitivity than firms that appear more financially constrained. We find this pattern for the entire sample period, for sub-periods, and for individual years. The results indicate that a higher sensitivity cannot be interpreted as evidence that a firm is more financially constrained. We discuss reasons and provide evidence why the opposite may be true. These findings challenge much of the existing evidence on the effects of financial constraints
Download or read book The Determinants of Financing Obstacles written by and published by World Bank Publications. This book was released on 2004 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Financial Constraints and Investment Cash Flow Sensitivity written by Zhangkai Huang and published by . This book was released on 2002 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a large sample of US listed companies, we show that the relation between financial constraints and investment-cash flow sensitivity is non-linear. The different results generated in previous studies could be explained by sample selection problems. We show that when using actual level of investment in the regression, as in the standard investment literature, coefficient on cash flow cannot be an accurate measure of financial constraints. The monotonic and positive relationship between financial constraints and investment-cash flow sensitivity is not robust in large-sample studies using detailed classification scheme.
Download or read book Do Investment cash Flow Sensitivities Provide Useful Measures of Financing Constraints written by Steven N. Kaplan and published by . This book was released on 1996 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book International Corporate Governance written by Kose John and published by Emerald Group Publishing. This book was released on 2011-03-31 with total page 210 pages. Available in PDF, EPUB and Kindle. Book excerpt: Presents research on corporate governance from a number of countries across the world, including the United States, Spain, Malaysia, Israel and others. This title examines many important corporate governance mechanisms, such as board characteristics, ownership structure, legal protection of shareholders, and annual general meetings.
Download or read book Investment Cash Flow Sensitivities Really Reflect Related Investment Decisions written by Robert M. Bushman and published by . This book was released on 2012 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: An important, unresolved issue in finance is whether the sensitivity of capital investment to internally generated cash flows reflects the impact of binding financing constraints on firms' investment decisions. We contribute new insight to this debate by providing systematic evidence that investment-cash flow sensitivity (ICFS) primarily reflects the fundamental connection between capital investment and working capital investment as interrelated manifestations of firm growth. We decompose the cash flow measure used in the literature, earnings before depreciation (EBD), into cash flow from operations (CFO), and working capital accruals (WCACC) which reflects net investment in working capital items like inventory and accounts receivable. We demonstrate that ICFS is driven by the natural co-movement between fixed investment and the working capital investment aspect of WCACC as complementary factors of production. In contrast, investment-CFO sensitivity is often negative and tends to decrease as financing constraints increase, inconsistent with CFO serving as a source of investment financing for constrained firms. What does this growth interpretation imply about the connection between ICFS and financing constraints? We argue that the nature of ICFS depends directly on the underlying catalyst of firm growth. If investment is driven solely by a reduction in the cost wedge between external and internal financing, ICFS reflects the investment consequences of this reduction in financing constraints. However, if capacity expansion is instead driven by macro shifts in the opportunity cost of firms' internal funds, shocks in investment opportunities, empire building behavior, or managerial irrationality, ICFS will not reflect financing frictions but rather the natural consequence of capacity expansion on the co-movement of fixed and working capital investment.
Download or read book Investment Cash Flow Sensitivity and Financial Constraints written by Klaas Mulier and published by . This book was released on 2018 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: We contribute to the financial constraints literature and the investment-cash flow sensitivity debate by defining a new and simple index of firm level financial constraints for unquoted European SMEs. Firms that are constrained according to our index pay higher interest rates on their debt. An exogenous financial supply shock reveals that our index also captures financial constraints in terms of the volume of credit. Our index outperforms existing indices in capturing financial constraints of unquoted SMEs. Finally, employing our proposed index to identify financially constrained firms and using firm-level employment growth as a control for investment opportunities, we find that constrained firms display the highest investment-cash flow sensitivities.
Download or read book Financial Constraints Mispricing and Corporate Investment written by George Wong and published by . This book was released on 2009 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the separate impact and joint effect of financial constraints and financial market mispricing on the sensitivity of investment to internal cash flows. Using a large sample of US manufacturing firms over the period 1971-2004, we find that financially unconstrained firms are more flexible in adjusting their sources of financing for corporate investment in response to financial market mispricing. Specifically, financially unconstrained firms tend to have lower (higher) investment-cash flow sensitivities in situations of overvaluation (undervaluation). This provides an explanation of why unconstrained firms have higher valuations than constrained firms.
Download or read book Conditional Investment cash Flow Sensitivities and Financing Constraints written by Stephen R. Bond and published by . This book was released on 2010 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt:
