scholarly journals The Influence of Financial Constraints and Real Options on Corporate Investment Decisions

2013 ◽  
Author(s):  
Ekaterina Kuzmicheva ◽  
Kirill E. Kuzmichev
Keyword(s):  
Real Options ◽  
Financial Constraints ◽  
Investment Decisions ◽  
Corporate Investment

scholarly journals Industry And Liquidity Effects In Corporate Investment And Cash Relationships

2011 ◽  
Vol 18 (1) ◽  
Author(s):  
William T. Charlton ◽  
Carol Lancaster ◽  
Jerry L. Stevens
Keyword(s):  
Cash Flow ◽  
Financial Constraints ◽  
Positive Relationship ◽  
Cash Holdings ◽  
Investment Decisions ◽  
Corporate Investment ◽  
Font Size ◽  
Investment Process

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt; mso-bidi-font-style: italic;"><span style="font-family: Times New Roman;">Prior studies find a positive relationship between a firm&rsquo;s cash flow and investment, but researchers disagree over whether this finding can be attributed to financial constraints. In this paper we introduce two new ways to segment firms to test for differences in cash&ndash;investment relationships. Our findings suggest that relationships between internal cash and investment are more complex than prior studies assume.<span style="mso-spacerun: yes;">&nbsp; </span>Internal liquidity plays a more important role in the investment process in some industries than in others.<span style="mso-spacerun: yes;">&nbsp; </span>Attempts to generalize a theory for investment decisions based on internal cash holdings must account for differences in both industry and internal cash constraints. </span></span></p>

scholarly journals Economic policy uncertainty and investment in Spain

SERIEs ◽  
2021 ◽  
Author(s):  
Daniel Dejuan-Bitria ◽  
Corinna Ghirelli
Keyword(s):  
Adverse Effect ◽  
Economic Policy ◽  
Strong Evidence ◽  
Investment Decisions ◽  
Corporate Investment ◽  
Precautionary Savings ◽  
Marginal Effect ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
High Uncertainty

AbstractThe aim of this paper is to investigate the effect of economic policy uncertainty on firms’ investment decisions. We focus on Spain for the period 1998–2014. To measure policy-related uncertainty, we borrow the economic policy uncertainty (EPU) indicator available for this country. We find strong evidence that uncertainty reduces corporate investment. This relationship appears to be nonlinear, being the marginal effect of uncertainty attenuated toward zero during periods of high uncertainty levels. Furthermore, the heterogeneous results suggest that the adverse effect of uncertainty is particularly relevant for highly vulnerable firms. Overall, these results are consistent with the hypotheses that economic policy-related uncertainty reduces corporate investment through increases in precautionary savings or to worsening of credit conditions.

scholarly journals The Effects of Securities Class Action Litigation on Corporate Liquidity and Investment Policy

2015 ◽  
Vol 50 (1-2) ◽  
pp. 251-275 ◽  
Author(s):  
Matteo Arena ◽  
Brandon Julio
Keyword(s):  
Investment Decisions ◽  
Market Value ◽  
Corporate Investment ◽  
Class Action ◽  
Investment Policy ◽  
Capital Expenditures ◽  
Litigation Risk ◽  
Securities Litigation ◽  
Corporate Liquidity ◽  
Temporal Effects

AbstractThe risk of securities class action litigation alters corporate savings and investment policy. Firms with greater exposure to securities litigation hold significantly more cash in anticipation of future settlements and other related costs. The result is due to firms accumulating cash in anticipation of lawsuits and not a consequence of plaintiffs targeting firms with high cash levels. The market value of cash is lower for firms exposed to litigation risk. Corporate investment decisions are also affected by litigation risk, as firms reduce capital expenditures in response. Our results are robust to endogeneity concerns and possible spurious temporal effects.

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