Financial constraints, asset tangibility, and corporate investment

• 成果类型: Article
• 署名作者: Almeida, Heitor; Campello, Murillo
• 署名单位: New York University; National Bureau of Economic Research; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhm019
• 发表日期: 2007
• 页码: 1429
• 关键词: capital-market imperfections; cash flow; internal finance; panel; sensitivity; liquidity; funds; FIRMS; RISK

摘要

Pledgeable assets support more borrowing, which allows for further investment in pledgeable assets. We use this credit multiplier to identify the impact of financing frictions on corporate investment. The multiplier suggests that investment-cash flow sensitivities should be increasing in the tangibility of firms' assets (a proxy for pledgeability), but only if firms are financially constrained. Our empirical results confirm this theoretical prediction. Our approach is not subject to the Kaplan and Zingales (1997) critique, and sidesteps problems stemming from unobservable variation in investment opportunities. Thus, our results strongly suggest that financing frictions affect investment decisions.