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|Title: ||Investment-cash flow sensitivities or cash-cash flow sensitivities? An evaluative framework for measures of financial constraints|
|Authors: ||D'ESPALLIER, Bert|
|Issue Date: ||2008|
|Publisher: ||BLACKWELL PUBLISHING|
|Citation: ||Journal of Business Finance and Accounting, 35(7-8). p. 943-968|
|Abstract: ||We evaluate two models commonly used for measuring financial constraints in their ability to discriminate between constrained and unconstrained firms. We compute firm-specific estimates for the cash flow sensitivity of investment (CFSI), and the cash flow sensitivity of cash (CFSC) and provide a framework that summarizes the performance of each model into a single numerical metric. We argue that this ‘ex-post’ approach provides interesting advantages over the traditional operationalization, in which firms are classified ‘ex-ante’ on a theoretical basis. Our findings suggest the superiority of the CFSI model over the CFSC model for a sample of manufacturing SMEs in Belgium.|
|ISI #: ||000259681400007|
|Type: ||Journal Contribution|
|Validation: ||ecoom, 2009|
|Appears in Collections: ||Research publications|
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