Document Server@UHasselt >
Research >
Research publications >

Please use this identifier to cite or link to this item: http://hdl.handle.net/1942/12958

Title: Analyzing firm-varying investment-cash flow sensitivities and cash-cash flow sensitivities: A Bayesian approach
Authors: D'Espallier, Bert
Huybrechts, Jolien
Lopez Iturriaga, Felix Javier
Issue Date: 2011
Publisher: Asociación Española de Contabilidad y Administración de Empresas (AECA)
Citation: Revista Espanola de Financiacion y Contabilidad-Spanish Journal of Financeand Accounting, 40(151), p. 439-468
Abstract: We employ a Bayesian estimator to construct firm-varying investment–cash flow sensitivities (ICFS) for a sample of 90 Spanish listed firms over a 10-year period (1999-2008). We then analyze which variables are associated with the firm-level ICFS estimates. The results indicate that firms with high ICFS are capital-intensive firms with high growth rates that have exhausted much of their debt capacity. Furthermore, high-ICFS firms have lower liquidity, lower profitability and lower stock market valuation than their counterparts. These results provide evidence that high-ICFS firms have higher external financing needs while faced with fewer available external financing sources. Our analysis suggests that, at least for Spanish listed firms over the observed sample period, the ICFS is an adequate proxy for gauging a firm’s exposure to financing constraints. A similar exercise on firm-varying cash–cash flow sensitivities (CCFS) suggests no relation between the firm’s CCFS and exposure to financing constraints.
URI: http://hdl.handle.net/1942/12958
ISI #: 000295611500003
ISSN: 0210-2412
Category: A1
Type: Journal Contribution
Validation: ecoom, 2012
Appears in Collections: Research publications

Files in This Item:

Description SizeFormat
Working version317.31 kBAdobe PDF

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.