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Reappearing Investment-Cash Flow Sensitivities

Andrén, Niclas LU orcid and Jankensgård, Håkan LU (2018) Financial Management Association European Conference 2018
Abstract
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.
Please use this url to cite or link to this publication:
author
and
organization
publishing date
type
Contribution to conference
publication status
published
subject
conference name
Financial Management Association European Conference 2018
conference location
Kristiansand, Norway
conference dates
2018-06-14
language
English
LU publication?
yes
id
5ff510eb-292c-42fb-8f11-5df827f92fe6
date added to LUP
2018-10-24 11:50:50
date last changed
2018-11-21 21:42:42
@misc{5ff510eb-292c-42fb-8f11-5df827f92fe6,
  abstract     = {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.},
  author       = {Andrén, Niclas and Jankensgård, Håkan},
  language     = {eng},
  title        = {Reappearing Investment-Cash Flow Sensitivities},
  year         = {2018},
}