The Sensitive Dynamic Study of Business Investment Decision-Making on Cash Flow

Abstract:

This study bases on investment - cash flow related theories and Euler model, references to the research of Forbes(2003) and Jaewoon Koo(2005), exports investment- cash flow sensitivity and impact factor model , makes 77 of China's listed manufacturing companies as a sample, uses the empirical to analyze (I/K)_i,t-1 ,(S/K)_i,t , (CF/K)_i,t, and also to analyze whether external financing , corporate nature (whether are state-owned enterprises), the degree of financial market development, the period around the financial crisis, the effect (f_i+d)_t have an impact on investment - cash flow. The empirical results show that although China's listed companies as a whole show a strong investment - cash flow sensitivity, this phenomenon is not just caused by financing constraints, trade-off theory or agency problems, but by the type of the company.

• Periodical: Advanced Materials Research (Volumes 403-408)
• Pages: 394-399
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.403-408.394
• Online since: November 2011
• Authors: Zhe Fan Piao, Mei Rong Ni
• Keywords: Cash-Flow Sensitivity, Enterprise Effect, Euler Model, Investment Decision-Making

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