Investment cash flow sensitivity and financial constraint: a cluster analysis approach

Maurizio La Rocca 1 Raffaele Staglianò 2 Tiziana La Rocca 3 Alfio Cariola 1
1 Unical - Università della Calabria [Arcavacata di Rende]
2 MRM - Montpellier Research in Management
3 University of Messina
Abstract : This article sheds light on the mixed empirical evidence concerning financial constraint and investment sensitivity to cash flow. The literature suggests that measuring financial constraint is far from straightforward, and we therefore propose a cluster analysis procedure to identify unambiguous groups of constrained firms. We found the investment results to be highly sensitive to cash flow for financial constraint firms. Moreover, in line with previous research, our results showed that the traditional criteria used to identify financially constrained firms led to ambiguous interpretations. Overall, our results propose that the cluster analysis can be used to encompass the various single-criterion approaches, thereby providing a finer measurement of the financial constraint construct and deeper insight into the relationship between investment sensitivity to cash flow and financial constraint.
Keywords : investment cash flow sensitivity investment financial constraints cluster analysis
Type de document :
Article dans une revue
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https://hal.umontpellier.fr/hal-02011130
Contributeur : Anthony Herrada <>
Soumis le : jeudi 7 février 2019 - 16:55:11
Dernière modification le : jeudi 6 juin 2019 - 14:55:32

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UNIV-MONTPELLIER | UNIV-PERP | AGROPOLIS | GESTION | UNIV-MONTP3

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Maurizio La Rocca, Raffaele Staglianò, Tiziana La Rocca, Alfio Cariola. Investment cash flow sensitivity and financial constraint: a cluster analysis approach. Applied Economics, Taylor & Francis (Routledge), 2015, 47 (41), pp.4442-4457. ⟨10.1080/00036846.2015.1030568 ⟩. ⟨hal-02011130⟩

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