Costly External Financing, Investment Timing, and Investment Cash Flow Sensitivity: A Reformulation of the Problem

Zouari, Anis

Abstract

Costly External Financing, Investment Timing, and Investment Cash Flow Sensitivity: A Reformulation of the Problem

Anis Zouari

University of Sfax - Institute of the High Business Studies of Sfax (IHEC)

September 1, 2008

International Research Journal of Finance and Economics, Vol. 19, pp. 107-113, 2008

Abstract:
This paper examines the relation between the external financing cost and the choice of the investment timing. Contrary to Lyandres (2007), this paper not only takes in consideration the variation of the investment but also the variation of its payoff. Results show that firms don't present the same degree of the investment-cash-flow sensitivity since this relation, which seems to be non-monotonic, is influenced by the evolutions of the financial cost and the investment amount.

Keywords: External financing, Investment, Cash flow

JEL Classification: G31

Accepted Paper Series

Date posted: April 7, 2009

Suggested Citation

Zouari, Anis, Costly External Financing, Investment Timing, and Investment Cash Flow Sensitivity: A Reformulation of the Problem (September 1, 2008). International Research Journal of Finance and Economics, Vol. 19, pp. 107-113, 2008. Available at SSRN: http://ssrn.com/abstract=1373859

Contact Information

Anis Zouari (Contact Author)

University of Sfax - Institute of the High Business Studies of Sfax (IHEC) ( email )

Sfax
Tunisia