Mickey Mouse and the Idiot Principle for Assessing Research Contribution: Discussion of ‘Is the Relationship between Investment and Conditional Cash Flow Volatility Ambiguous, Asymmetric or Both?’
12 Pages Posted: 28 Nov 2013
Date Written: December 2013
Keefe and Tate ([Keefe, M., 2013]) provide both interesting and worthwhile insights into whether, under what circumstances and to what extent cash flow volatility impacts corporate investment. In the current paper, I have two related goals. First, more narrowly, I provide a constructively critical commentary on salient aspects of their empirical strategy, giving particular emphasis to the key drivers of Keefe and Tate's contribution to the literature. Second, illustrated in the context of Keefe and Tate, my broader goal is to give general advice especially aimed at novice researchers on how to make any empirical study more appealing to a critical reader.
Keywords: Cash flow volatility; Financial flexibility; Investment; Real options and financial constraints
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