Firm Size, Financial Constraints and Inverse Monotonicity of Investment-Cash Flow Sensitivity

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dc.contributor.authorÇobanoğlu, Cihan
dc.contributor.authorGümrah, Ümit
dc.date.accessioned2024-09-25T20:15:19Z
dc.date.available2024-09-25T20:15:19Z
dc.date.issued2022
dc.departmentAbant İzzet Baysal Üniversitesien_US
dc.description.abstractFinancial constraints hypothesis states that firms that are more likely to be financially constrained should have higher investment-cash flow sensitivity. This paper aims at testing the financial constraints hypothesis in a period when access to credit is relatively easy using firm size as a priori criterion for access to credit. We use data of firms listed on Borsa Istanbul during the period 2006–2017 and estimate regressions with panel fixed effects. We find that investment-cash flow sensitivities monotonically increase from small firms to large firms across four groups. The findings reject the financial constraints hypothesis and imply an inverse monotonic relationship between investment-cash flow sensitivities and financial constraints. We conclude that any difference in investment-cash flow sensitivities estimated by a cash flow-augmented q investment equation can’t be interpreted as an indicator of financial constraints especially when firms are not homogenous in terms of cash flow which can indicate financial distress or free cash flow problem.en_US
dc.identifier.doi10.11616/asbi.1094934
dc.identifier.endpage647en_US
dc.identifier.issn2757-9425
dc.identifier.issue2en_US
dc.identifier.startpage632en_US
dc.identifier.trdizinid1113283en_US
dc.identifier.urihttps://doi.org/10.11616/asbi.1094934
dc.identifier.urihttps://search.trdizin.gov.tr/tr/yayin/detay/1113283
dc.identifier.urihttps://hdl.handle.net/20.500.12491/15078
dc.identifier.volume22en_US
dc.indekslendigikaynakTR-Dizinen_US
dc.language.isoenen_US
dc.relation.ispartofAbant Sosyal Bilimler Dergisien_US
dc.relation.publicationcategoryMakale - Ulusal Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/openAccessen_US
dc.snmzYK_20240925en_US
dc.subjectFirm Sizeen_US
dc.subjectFinancial Constraintsen_US
dc.subjectInvestment-Cash Flow Sensitivityen_US
dc.subjectFinancial Distressen_US
dc.subjectFree Cash Flowen_US
dc.titleFirm Size, Financial Constraints and Inverse Monotonicity of Investment-Cash Flow Sensitivityen_US
dc.typeArticleen_US

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