The browser you are using is not supported by this website. All versions of Internet Explorer are no longer supported, either by us or Microsoft (read more here: https://www.microsoft.com/en-us/microsoft-365/windows/end-of-ie-support).

Please use a modern browser to fully experience our website, such as the newest versions of Edge, Chrome, Firefox or Safari etc.

Portrait of Niclas Andrén. Photo.

Niclas Andrén

Head of the Department of Business Administration

Portrait of Niclas Andrén. Photo.

Reappearing Investment-Cash Flow Sensitivities

Author

  • Niclas Andrén
  • Håkan Jankensgård

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