Investment-cash flow sensitivity cannot be a good measure of financial constraints: Evidence from the time series

• 成果类型: Article
• 署名作者: Chen, Huafeng (Jason); Chen, Shaojun (Jenny)
• 署名单位: University of British Columbia
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2011.08.009
• 发表日期: 2012
• 页码: 393-410
• 关键词: Investment-cash flow sensitivity; financial constraints; Credit crunch; measurement error

摘要

Investment-cash flow sensitivity has declined and disappeared, even during the 2007-2009 credit crunch. If one believes that financial constraints have not disappeared, then investment-cash flow sensitivity cannot be a good measure of financial constraints. The decline and disappearance are robust to considerations of R&D and cash reserves, and across groups of firms. The information content in cash flow regarding investment opportunities has declined, but measurement error in Tobin's q does not completely explain the patterns in investment-cash flow sensitivity. The decline and disappearance cannot be explained by changes in sample composition, corporate governance, or market power and remain a puzzle. (C) 2011 Elsevier B.V. All rights reserved.