The impact of cash flows and firm size on investment: The international evidence

Kadapakkam, Palani Rajan; Kumar, P. C.; Riddick, Leigh A.

doi:10.1016/s0378-4266(97)00059-9

Cited by 334 publications

(264 citation statements)

References 24 publications

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“…Future work will add R&D and innovation expenditures to the picture, to see whether financial constraints have a different effect on long-term efficiency. Hoshi et al (1991) -group membership Bond and Meghir (1994) -dividend over capital stock + share issues Chirinko and Schaller (1995) -age -concentration of ownership -group membership Gilchrist and Himmelberg (1995) -dividend payout ratio -size -existence of bond rating Kaplan and Zingales (1997) -qualitative data from financial statements Kadapakkam et al (1998) -size Becchetti and Trovato (2002) -survey data (firm self-assessment) Campa and Shaver (2002) -group membership Greenaway et al (2005) -liquidity -credit rating Cleary (2006) -size -dividend payout ratio -∆ dividend payout ratio Savignac (2006) -survey data (firm self-assessment) Whited (2006) -dividend policy -size -group membership Link function: complementary log-log with unobserved heterogeneity. Non parametric baseline, hazard Function.…”

Section: Resultsmentioning

confidence: 99%

“…Hence, they conclude, the latter can no longer be regarded as a useful measure of financial constraint. Since then, other authors have reported evidence of a negative relation between investment-cash flow sensitivity and financial constraints (for instance Kadapakkam et al, 1998;Cleary, 2006). Although a reference to the above literature is due, in what follows we will try to steer clear of this debate and only review in greater detail the way in which different authors have identified financially constrained firms, irrespective of the specific aim of their study.…”

Section: Existing Research Strategiesmentioning

confidence: 99%

“…Often firms are simply placed in two different groups on the basis of some arbitrary threshold, such as median values, or first quartiles (Devereux and Schiantarelli, 1990;Gilchrist and Himmelberg, 1995;Greenaway et al, 2005;Cleary, 2006). Other authors use a finer classification and classify firms in three or more groups (Fazzari et al, 1988;Kadapakkam et al, 1998;Kaplan and Zingales, 1997). Almost all the papers rely on a limited list of variables such as size, age, dividend policy, membership in a group or conglomerate, existence of bond rating, and concentration of ownership.…”

Section: Existing Research Strategiesmentioning

confidence: 99%

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The impact of financial constraints on firm survival and growth

Musso¹,

Schiavo²

2008

J Evol Econ

325

224

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We propose a new approach for identifying and measuring the degree of financial constraint faced by firms and use it to investigate the effect of financial constraints on firm survival and development. Using panel data on French manufacturing firms over the 1996 -2004 period, we find that (i) financial constraints significantly increase the probability of exiting the market, (ii) access to external financial resources has a positive effect on the growth of firms in terms of sales, capital stock and employment, (iii) financial constraints are positively related with productivity growth in the shortrun. We interpret this last result as the sign that constrained firms need to cut costs in order to generate the resources they cannot raise on financial markets.

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Section: Resultsmentioning

confidence: 99%

Section: Existing Research Strategiesmentioning

confidence: 99%

Section: Existing Research Strategiesmentioning

confidence: 99%

See 1 more Smart Citation

The impact of financial constraints on firm survival and growth

Musso¹,

Schiavo²

2008

J Evol Econ

325

224

View full text Add to dashboard Cite

show abstract

“…For example, Devereux and Schiantarelli (1990), Gertler and Gilchrist (1994), Oliner and Rudebusch (1992), Kadapakkam, Kumar, and Riddick (1998) and Shin and Kim (2002) use size, age and pattern of insider trading, Hoshi et al (1991) and Shin and Park (1999) use degree of industrial and bank affiliation, Bond and Meghir (1994) use dividend payout ratio. Alternatively Calomiris, Himmelberg, and Wachtel (1995) use credit rating, Whited (1992) use bond rating, and Schaller (1993) Using varying combinations, some other classification indexes of financial constraints have also been developed.…”

Section: Classification Of Firms Into Financially More or Less Constrmentioning

confidence: 99%

Corporate efficiency, credit status and investment

Quader

Taylor

2017

The European Journal of Finance

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 8285 June 2014 ABSTRACT Corporate Efficiency, Credit Status and InvestmentUsing a panel of 1122 UK firms listed on the London Stock Exchange over the period of 1981 to 2009, endogenous switching regression models (SRM) incorporating a predicted corporate efficiency index are estimated in this paper in an effort to clarify the role of cash flow in examining the impact of capital-market imperfections. It is revealed that a firm's constrained credit status changes with the improvement of its efficiency. The results further reveal that financially constrained firm's investment is comparatively more sensitive to cash flow, but this sensitivity is negatively and significantly related with corporate efficiency. These results point to the fact that high investment sensitivity to cash flow may not be solely driven by measurement error in investment opportunity, but may still be interpreted as a consequence of imperfect substitutability between internal and external financing arising from the capital market imperfections.JEL Classification: C34, D92, G14, L21

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“…Komponen stok modal termasukah nilai bersih hartanah, loji dan peralatan pada masa t selepas susut nilai,pengurangan dan pelunasan yang dinilai dalam RM. Penggunaan aset tetap bersih boleh mengambil kira perbezaan saiz modal yang sedia ada dan susutnilai barang modal antara firma (Kadapakkam et al 1998). …”

Section: Stok Modal (K)unclassified

Pelaburan Firma dan Dasar Monetari: Analisis Panel ke atas Firma Patuh Syariah di Malaysia

Napiah

Karim²,

Zaidi³

et al. 2015

JEM

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ABSTRAKKertas ini mengkaji kesan perubahan dasar monetari ke atas saluran kunci kira-kira firma (balance sheet channel) dengan memberikan tumpuan kepada perbelanjaan pelaburan firma patuh syariah yang tersenarai di Bursa Malaysia dari tahun [2003][2004][2005][2006][2007][2008][2009][2010][2011] Keywords: Monetary policy, firm investment; Shariah compliant firms; dynamic panel data PENGENALANDasar monetari mengandungi beberapa peraturan dan tindakan yang digunapakai oleh bank pusat untuk mencapai matlamat ekonomi yang diingini seperti kestabilan harga dan pertumbuhan ekonomi yang lestari. Walau bagaimanapun, bank pusat turut mempunyai mandat untuk mencapai matlamat ekonomi yang lain seperti guna tenaga penuh, memastikan kestabilan kewangan domestik dan kestabilan dalam sektor asing. Di Malaysia, Bank Negara Malaysia (BNM) berperanan secara aktif untuk melaksanakan dasar monetari bagi mencapai matlamat ekonomi yang disasarkan iaitu kestabilan harga. Secara umumnya, pelaksanaan dasar monetari adalah bertujuan untuk menggalakkan pertumbuhan ekonomi yang stabil, di samping mengawal bekalan wang dan juga kredit yang dibekalkan dalam ekonomi. Perubahan dalam dasar BNM akan memberikan kesan langsung terhadap struktur kadar bunga (kadar bunga pinjaman, kadar bunga deposit, dan kadar bunga pasaran wang), yang mana akan memberikan kesan kepada kos dana dan kecairan dalam sistem perbankan. Hal ini seterusnya akan mempengaruhi sektor swasta, terutamanya kedudukan kunci kira-kira daripada aspek perbelanjaan pelaburan, Jurnal Ekonomi Malaysia 49(1) 2015 71 -82 http://dx

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The impact of cash flows and firm size on investment: The international evidence

Cited by 334 publications

References 24 publications

The impact of financial constraints on firm survival and growth

The impact of financial constraints on firm survival and growth

Corporate efficiency, credit status and investment

Pelaburan Firma dan Dasar Monetari: Analisis Panel ke atas Firma Patuh Syariah di Malaysia

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