Niclas Andrén
Head of the Department of Business Administration
Reappearing Investment-Cash Flow Sensitivities
Author
Summary, in English
According to previous research the investment-cash flow sensitivity has fallen over time to levels approaching zero in the 2000s, prompting some researchers to argue that the sensitivity cannot be a reasonable measure of financing constraints. We show that differences in sensitivities reappear if one sorts firm according to firms’ need for funding (investment rates) and the cost of external funding (leverage ratios). High capex-high leverage firms consistently have higher sensitivities, even throughout the 2000s.
Department/s
- Department of Business Administration
Publishing year
2018
Language
English
Document type
Conference - other
Topic
- Business Administration
Conference name
Financial Management Association European Conference 2018
Conference date
2018-06-14
Conference place
Kristiansand, Norway
Status
Published