Global Cash Flow Sensitivities

15 Pages Posted: 9 Aug 2017

See all articles by Simon Döring

Simon Döring

University of Hamburg

Wolfgang Drobetz

University of Hamburg

Malte Janzen

University of Hamburg

Iwan Meier

HEC Montreal - Department of Finance

Date Written: July 17, 2017

Abstract

We examine the role of a country’s institutional framework for investment and financing activities. A country’s financial structure, investor rights, and legal environment are important determinants of the relation between internal cash flow and firms’ investment and financing behavior. Firms from countries with a more developed institutional framework exhibit higher financing cash flow sensitivities. These firms are more likely to substitute a cash flow shortfall with equity issues. Conversely, firms’ investment-cash flow sensitivity is higher in countries with a less developed institutional framework.

Keywords: Cash Flow Sensitivity, Financial Development, Law and Finance

JEL Classification: G20, G31, G38

Suggested Citation

Döring, Simon and Drobetz, Wolfgang and Janzen, Malte and Meier, Iwan, Global Cash Flow Sensitivities (July 17, 2017). Available at SSRN: https://ssrn.com/abstract=3014688 or http://dx.doi.org/10.2139/ssrn.3014688

Simon Döring (Contact Author)

University of Hamburg ( email )

Moorweidenstraße 18
Hamburg, 20148
Germany

Wolfgang Drobetz

University of Hamburg ( email )

Moorweidenstrasse 18
Hamburg, 20148
Germany

Malte Janzen

University of Hamburg ( email )

Moorweidenstraße 18
Hamburg, 20148
Germany

Iwan Meier

HEC Montreal - Department of Finance ( email )

3000 Chemin de la Cote-Sainte-Catherine
Montreal, Quebec H3T 2A7 H2J 2K9
Canada
(514) 340-3198 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
30
Abstract Views
376
PlumX Metrics