Investment cash flow sensitivity and financing constraints: New evidence from Indian business group firms

R. George; Mohammed Rezaul Kabir; J. Qian

doi:10.1016/j.mulfin.2010.12.003

Investment cash flow sensitivity and financing constraints: New evidence from Indian business group firms

R. George, Mohammed Rezaul Kabir, J. Qian

Faculty of Behavioural, Management and Social Sciences

Research output: Contribution to journal › Article › Academic › peer-review

33 Citations (Scopus)

Abstract

A controversy exists on the use of the investment–cash flow sensitivity as a measure of financing constraints of firms.Were-examine this controversy by analyzing firms affiliated to Indian business groups. We find a strong investment–cash flow sensitivity for both group-affiliated and independent firms, but no significant difference in the sensitivity between them. Additional tests consistently demonstrate that investment–cash flow sensitivity of Indian group affiliated firms is not significantly lower relative to unaffiliated firms.

Original language	English
Pages (from-to)	69-88
Number of pages	20
Journal	Journal of multinational financial management
Volume	21
Issue number	2
DOIs	https://doi.org/10.1016/j.mulfin.2010.12.003
Publication status	Published - 2011

Keywords

IR-76493
METIS-276970

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10.1016/j.mulfin.2010.12.003

Cite this

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title = "Investment cash flow sensitivity and financing constraints: New evidence from Indian business group firms",

abstract = "A controversy exists on the use of the investment–cash flow sensitivity as a measure of financing constraints of firms.Were-examine this controversy by analyzing firms affiliated to Indian business groups. We find a strong investment–cash flow sensitivity for both group-affiliated and independent firms, but no significant difference in the sensitivity between them. Additional tests consistently demonstrate that investment–cash flow sensitivity of Indian group affiliated firms is not significantly lower relative to unaffiliated firms.",

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AU - George, R.

AU - Kabir, Mohammed Rezaul

AU - Qian, J.

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N2 - A controversy exists on the use of the investment–cash flow sensitivity as a measure of financing constraints of firms.Were-examine this controversy by analyzing firms affiliated to Indian business groups. We find a strong investment–cash flow sensitivity for both group-affiliated and independent firms, but no significant difference in the sensitivity between them. Additional tests consistently demonstrate that investment–cash flow sensitivity of Indian group affiliated firms is not significantly lower relative to unaffiliated firms.

AB - A controversy exists on the use of the investment–cash flow sensitivity as a measure of financing constraints of firms.Were-examine this controversy by analyzing firms affiliated to Indian business groups. We find a strong investment–cash flow sensitivity for both group-affiliated and independent firms, but no significant difference in the sensitivity between them. Additional tests consistently demonstrate that investment–cash flow sensitivity of Indian group affiliated firms is not significantly lower relative to unaffiliated firms.

KW - IR-76493

KW - METIS-276970

U2 - 10.1016/j.mulfin.2010.12.003

DO - 10.1016/j.mulfin.2010.12.003

M3 - Article

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SP - 69

EP - 88

JO - Journal of multinational financial management

JF - Journal of multinational financial management

SN - 1042-444X

IS - 2

ER -

Investment cash flow sensitivity and financing constraints: New evidence from Indian business group firms

Abstract

Keywords

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