Information Production, Cash Flow and Corporate Investment

2001 ◽  
Author(s):  
Qiao Liu ◽  
Rong Qi
Keyword(s):  
Cash Flow ◽  
Corporate Investment ◽  
Information Production

scholarly journals The Sensitivity of Firms’ Investment to Uncertainty and Cash Flow: Evidence From Listed State-Owned Enterprises and Non-State-Owned Enterprises in China

SAGE Open ◽  
2020 ◽  
Vol 10 (1) ◽  
pp. 215824402090343 ◽  
Author(s):  
Muhammad Arif Khan ◽  
Xuezhi Qin ◽  
Khalil Jebran ◽  
Abdul Rashid
Keyword(s):  
Economic Policy ◽  
Cash Flow ◽  
Generalized Method Of Moments ◽  
Corporate Investment ◽  
Policy Uncertainty ◽  
Market Uncertainty ◽  
Negative Effects ◽  
Economic Policy Uncertainty ◽  
Listed Firms ◽  
Positive Effects

This study examines the association between various uncertainties and corporate investment and further investigates this association between state-owned enterprises (SOEs) and non-state-owned enterprises (non-SOEs). Moreover, this study analyzes the indirect effects of uncertainty on corporate investment through cash flow. The current research uses an unbalanced panel data of Chinese nonfinancial listed firms for the period 1999–2016. To control endogeneity issues, this study applies a robust two-step system generalized method of moments (GMM) technique to estimate the model. Empirical findings indicate that market-based and firm-specific uncertainties have positive effects, whereas economic policy and CAPM-based uncertainties have negative effects on corporate investment. Furthermore, results indicate that the effects of market-based, CAPM-based, and firm-specific uncertainties (economic policy uncertainty) were less (more) prominent for SOEs. Additional analyses show that cash flow stimulates the effect of firm-specific uncertainty on SOEs’ investment, whereas it weakens the influence of CAPM-based uncertainty (economic policy uncertainty) on investment of non-SOEs (SOEs). Moreover, cash flow attenuates the market uncertainty effect on investment.

Why Did the Investment–Cash Flow Sensitivity Decline over Time?

2020 ◽  
pp. 1-37
Author(s):  
Zhen Wang ◽  
Chu Zhang
Keyword(s):  
Cash Flow ◽  
New Economy ◽  
Corporate Investment ◽  
Flow Sensitivity ◽  
Capital Productivity ◽  
Cash Flow Sensitivity ◽  
Old Economy ◽  
Over Time ◽  
Empirical Analyses

Abstract We propose an explanation for why corporate investment used to be sensitive to cash flow and why the sensitivity declined over time. The sensitivity stems from the informational role of cash flow in inferring the productivity of tangible capital in the old economy. Over time, however, more new-economy firms enter the market. These firms have reduced tangible capital productivity and reduced cash-flow predictability, which drives the decline in the average investment–cash flow sensitivity. Theoretical and empirical analyses support this explanation.

scholarly journals Monetary Policy, Cash Flow and Corporate Investment: Empirical Evidence from Vietnam

2019 ◽  
Vol 12 (1) ◽  
pp. 46 ◽  
Author(s):  
Linh My Tran ◽  
Chi Mai ◽  
Phuoc Huu Le ◽  
Chi Bui ◽  
Linh Nguyen ◽  
...  
Keyword(s):  
Monetary Policy ◽  
Cash Flow ◽  
Corporate Investment ◽  
Cash Flows ◽  
Sustainable Growth ◽  
Corporate Investments ◽  
Monetary Policies ◽  
Financial Firms ◽  
Internal Cash Flow ◽  
Flow Effects

This paper examines the relationships between macroscopic determinants (typically, monetary policies) and microscopic factors (mainly, cash flows and other controlling variables) on corporate investment. By employing system-GMM estimation for the 250 Vietnamese non-financial firms, the authors find that the expansionary monetary policy not only encourages the borrowing activities but also results in more corporate investment activities over the period from 2006 to 2016. Noticeably, the internal cash flow is also significant factor, which enhances the activities of corporate investment. Finally, there are differences between internal cash flow effects on corporate investments between two groups, divided by three theoretical criteria. To recapitulate, our implications highlight the importance of monetary policy stability for sustainable growth in corporate investment in Vietnam.

Employment, Corporate Investment, and Cash-Flow Risk

2019 ◽  
Vol 54 (4) ◽  
pp. 1855-1898 ◽  
Author(s):  
Saad Alnahedh ◽  
Sanjai Bhagat ◽  
Iulian Obreja
Keyword(s):  
Cash Flow ◽  
Employment Growth ◽  
Corporate Investment ◽  
Policy Implications ◽  
Policy Makers ◽  
Economic Recessions ◽  
Corporate Employment ◽  
Cash Flow Risk ◽  
Intangible Investment

We highlight the role of cash-flow uncertainty on corporate employment and investment. We find that a 1% increase in cash-flow uncertainty leads to a 0.62% decrease in tangible investment, a 1.39% decrease in intangible investment, and a 3.67% decrease in corporate employment growth. Our results are statistically and economically significant. We further find that these relationships are stronger during economic recessions. Our findings have significant policy implications. To wit, if policy makers would like corporations to increase their employment and investment, they should focus on policies that decrease corporate cash-flow uncertainty.

Determinants of Corporate Investment Decisions: The Case of Vietnam

2013 ◽  
pp. 32-48 ◽  
Author(s):  
Phan Dinh Nguyen ◽  
Dong Phan Thi Anh
Keyword(s):  
Cash Flow ◽  
Firm Size ◽  
Investment Decisions ◽  
Capital Intensity ◽  
Corporate Investment ◽  
Fixed Capital ◽  
Business Risk ◽  
Dynamic Approach ◽  
Firm Level ◽  
Static Approach

The purpose of this study is to examine determinants of corporate investment decisions. By adopting a static approach, the findings show that cash-flow, fixed capital intensity, business risk, leverage, and firm size are the key elements in making investment activities. Additionally, by using a dynamic approach, the results reveal that past investment also affects investment decisions at the firm level.

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