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Constraints and Costs : Essays in Corporate Finance

Christie, Nick LU (2025) In Lund Studies in Economics and Management 175.
Abstract
This thesis investigates how firms respond to internal and external financial pressures through four self-contained empirical studies in corporate finance. The first study explores how asset tangibility influences investment behaviour, finding that firms with more physical assets exhibit stronger sensitivity of investment to cash flow, indicating a deeper role for tangibility beyond traditional financial constraints. The second study examines the link between financial flexibility and cost stickiness, revealing that firms with greater financial resources tend to retain underutilised inputs during downturns, enhancing their ability to absorb shocks. The third study focuses on labour retention during unexpected revenue declines, showing that... (More)
This thesis investigates how firms respond to internal and external financial pressures through four self-contained empirical studies in corporate finance. The first study explores how asset tangibility influences investment behaviour, finding that firms with more physical assets exhibit stronger sensitivity of investment to cash flow, indicating a deeper role for tangibility beyond traditional financial constraints. The second study examines the link between financial flexibility and cost stickiness, revealing that firms with greater financial resources tend to retain underutilised inputs during downturns, enhancing their ability to absorb shocks. The third study focuses on labour retention during unexpected revenue declines, showing that liquidity is a key driver of resilience, more so than equity or operational flexibility. Lastly, the fourth study analyses how labour adjustment costs impact financial constraints, demonstrating that higher costs reduce investment responsiveness to cash flow, thereby limiting financial flexibility. (Less)
Please use this url to cite or link to this publication:
author
supervisor
opponent
  • Professor Holmén, Martin, University of Gothenburg
organization
publishing date
type
Thesis
publication status
published
subject
keywords
Financial Constraints, Financial Resources, Investment, Risk Management, Cost Stickiness
in
Lund Studies in Economics and Management
volume
175
pages
192 pages
publisher
Lund University
defense location
EC3:207
defense date
2025-05-16 14:15:00
ISBN
978-91-8104-453-9
978-91-8104-454-6
language
English
LU publication?
yes
id
5ff7d871-fe2b-4eb3-bb9a-3f1397e6f875
date added to LUP
2025-04-22 14:01:53
date last changed
2025-06-16 08:09:46
@phdthesis{5ff7d871-fe2b-4eb3-bb9a-3f1397e6f875,
  abstract     = {{This thesis investigates how firms respond to internal and external financial pressures through four self-contained empirical studies in corporate finance. The first study explores how asset tangibility influences investment behaviour, finding that firms with more physical assets exhibit stronger sensitivity of investment to cash flow, indicating a deeper role for tangibility beyond traditional financial constraints. The second study examines the link between financial flexibility and cost stickiness, revealing that firms with greater financial resources tend to retain underutilised inputs during downturns, enhancing their ability to absorb shocks. The third study focuses on labour retention during unexpected revenue declines, showing that liquidity is a key driver of resilience, more so than equity or operational flexibility. Lastly, the fourth study analyses how labour adjustment costs impact financial constraints, demonstrating that higher costs reduce investment responsiveness to cash flow, thereby limiting financial flexibility.}},
  author       = {{Christie, Nick}},
  isbn         = {{978-91-8104-453-9}},
  keywords     = {{Financial Constraints; Financial Resources; Investment; Risk Management; Cost Stickiness}},
  language     = {{eng}},
  publisher    = {{Lund University}},
  school       = {{Lund University}},
  series       = {{Lund Studies in Economics and Management}},
  title        = {{Constraints and Costs : Essays in Corporate Finance}},
  url          = {{https://lup.lub.lu.se/search/files/217678928/Thesis_Nick_C.pdf}},
  volume       = {{175}},
  year         = {{2025}},
}