Download or read book Investment Cash Flow Sensitivity Under Managerial Optimism written by Ezzeddine Ben Mohamed and published by . This book was released on 2013 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investment cash flow sensitivity constitutes one important block of the corporate financial literature. While it is well documented in standard corporate finance, it is still young under behavioral corporate finance. In this paper, we test the investment cash flow sensitivity among panel data of American industrials firms during 1999-2010. Using Q-model of investment (Tobin 1969), we construct and introduce a proxy of managerial optimism following Malmendier and Tate (2005a) to show the impact of CEOs optimism in the relationship between investment and internal cash flow. Our results report a positive and significant coefficient of investment to cash flow for the full sample. While, estimations of our model using sub-sample of more and less constrained firms, we find that the sensitivity exist and stronger only for totally constrained group. We find also that board characteristics can reduce investment policy' distortions.
Download or read book Investment Cash Flow Sensitivity and Managerial Optimism written by Ezzeddine Ben Mohamed and published by . This book was released on 2013 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we present a literature review and classification scheme for investment cash flow sensitivity under behavioral corporate finance. The former consists of all published articles between 2000 and 2011 in different journals that are appropriate outlets for BCF research. The articles are classified and results of these are presented and analyzed. The classification of articles was based on nine criteria; journals, date of publication, paper nature, the context of the study adopted behavioral biases, adopted approach, behavioral biases measurement, the adopted assumption, econometric approach and empirical findings. Literature on investment cash flow sensitivity under behavioral corporate finance isn't well developed. In fact, the behavioral corporate finance is very young. Our review shows that behavioral biases (optimism and overconfidence) have an explanatory power and they can succeed to explain the dependence of corporate investment on the internal cash flow availability. This result is protected in the most cases by the some restrictive assumptions: the absence of agency costs and asymmetric information. Based on the review, suggestions for future research are likewise provided.
Download or read book Managerial Optimism and the Impact of Cash Flow Sensitivity on Corporate Investment written by Dimitrios I. Maditinos and published by . This book was released on 2016 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose - The existence o ...
Download or read book CEO s Personal Characteristics Ownership and Investment Cash Flow Sensitivity written by Ezzeddine Ben Mohamed and published by . This book was released on 2014 with total page 6 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study tries to extend previous works on behavioral corporate finance by examining the interaction between investment cash flow sensitivity and various CEO characteristics in either the existence or inexistence of managerial optimism. Using a Q-investment model and departing from a sample of 475 annual observations, our results highlight that CEO's financial education, CEO's ownership and their optimism bias can explain distortions in corporate investment policy since they affect investment cash flow's relationship.
Download or read book Empirical Capital Structure written by Christopher Parsons and published by Now Publishers Inc. This book was released on 2009 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical Capital Structure reviews the empirical capital structure literature from both the cross-sectional determinants of capital structure as well as time-series changes.
Download or read book Managerial Optimism and Corporate Investment written by Markus Glaser and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Cash Flow Sensitivity of Investment written by Armen Hovakimian and published by . This book was released on 2010 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investment cash flow sensitivity is associated with both undervestment when cash flows are low and overinvestment when cash flows are high. The accessibility of external capital is positively correlated with cash flows, intensifying investment cash flow sensitivity. Managers actively counteract the variations in internal and external liquidity by accumulating working capital when liquidity is high and draining it when liquidity is low. These results imply that cash flow sensitive firms face financial constraints, which are binding in low cash flow years. While financial constraints have an economically significant impact on investment timing, cash flow sensitive firms alleviate their effects and, actually, overinvest, on aggregate.
Download or read book The Financial Consequences of Behavioural Biases written by Imad A. Moosa and published by Springer. This book was released on 2017-10-25 with total page 184 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a concise analysis of behavioural biases and their implications for financial decision making. The book is written in the normative tradition, arguing strongly for the superiority of behavioural finance with respect to explaining observed phenomena in financial markets. It offers some unique features, including a discussion of the issue of conspiracy theory and how behavioural biases lead to belief in conspiracy theories. Lingering belief in the principles of neoclassical finance is attributed in part to the doctrine of publish or perish, which dominates contemporary academia. The offshoots of behavioural finance are discussed in detail, including ecological finance, environmental finance, social finance, experimental finance, neurofinance, and emotional finance. A comprehensive discussion of narcissism is presented where it is demonstrated that narcissistic behaviour is prevalent in the finance industry and that it led to the eruption of the global financial crisis.
Download or read book Is Investment cash Flow Sensitivity Caused by the Agency Costs Or Asymmetric Information written by Grzegorz Pawlina 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 Behavioral Corporate Finance written by Hersh Shefrin and published by College Ie Overruns. This book was released on 2017-04-16 with total page 300 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 Impact of Corporate Governance and Financial Development on Investment Cash Flow Sensitivity Evidence from US REIT Companies written by 莊穎皜 and published by . This book was released on 2018 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Investment Cash Flow Sensitivity written by Klaas Mulier and published by . This book was released on 2014 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: Low cash flow volatility firms receive stronger signals about future cash flow from a given cash flow shock, yielding a larger drop in demand for external finance and their cost of external finance, implying higher investment-cash flow sensitivities (ICFS). Empirical analysis in 6 European countries confirms this. Considering firms with the same cash flow volatility, ICFS are more pronounced for financially constrained firms (cf. Fazzari et al. (1988)). Considering firms with the same level of financial constraints, ICFS are more pronounced for firms with low cash flow volatility (cf. Kaplan and Zingales (1997)). The contradictory findings in the literature may be explained by cash flow volatility.
Download or read book Handbook of the Economics of Finance written by G. Constantinides and published by Elsevier. This book was released on 2003-11-04 with total page 698 pages. Available in PDF, EPUB and Kindle. Book excerpt: Arbitrage, State Prices and Portfolio Theory / Philip h. Dybvig and Stephen a. Ross / - Intertemporal Asset Pricing Theory / Darrell Duffle / - Tests of Multifactor Pricing Models, Volatility Bounds and Portfolio Performance / Wayne E. Ferson / - Consumption-Based Asset Pricing / John y Campbell / - The Equity Premium in Retrospect / Rainish Mehra and Edward c. Prescott / - Anomalies and Market Efficiency / William Schwert / - Are Financial Assets Priced Locally or Globally? / G. Andrew Karolyi and Rene M. Stuli / - Microstructure and Asset Pricing / David Easley and Maureen O'hara / - A Survey of Behavioral Finance / Nicholas Barberis and Richard Thaler / - Derivatives / Robert E. Whaley / - Fixed-Income Pricing / Qiang Dai and Kenneth J. Singleton.
Download or read book The Impact of Growth Opportunities on the Investment Cash Flow Sensitivity written by Frederiek Schoubben and published by . This book was released on 2008 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the relevance of growth opportunities for the interpretation of investment-cash flow sensitivity of large Belgian companies. We use data on both listed and large unlisted firms to better distinguish between issues of overinvestment due to agency problems and underinvestment due to capital constraints. Simultaneously this data set offers opportunities to incorporate a wide variation in levels of asymmetric information. We show that, contrary to what is generally accepted, decreasing cash flow sensitivity as growth prospects improve need not indicate overinvestment. Rather it may indicate that capital constrained firms increase the use of external financing in high growth periods as these financing sources then tend to become more appealing. As a result the dependence of investment decisions on internal financing is diminished, thereby reducing measured cash flow sensitivity below the level of low growth years.
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 The Role of Cash Holdings in Reducing Investment Cash Flow Sensitivity written by Özgür Arslan and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
