Work

Investment-Cash Flow Sensitivities are not Valid Measures of Financing Constraints

Year: 2000

Type: report

Abstract: Kaplan and Zingales [1997] provide both theoretical arguments and empirical evidence that investment-cash flow sensitivities are not good indicators of financing constraints.Fazzari, Hubbard and Petersen [1999] criticize those findings.In this note, we explain how the Fazzari et al. [1999] criticisms are either very supportive of the claims in Kaplan and Zingales [1997] or incorrect.We conclude with a discussion of unanswered questions.

Source: National Bureau of Economic Research

DOI: 10.3386/w7659

Authors: Steven Kaplan, Luigi Zingales

Institutions: University of Chicago, National Bureau of Economic Research, Centre for Economic Policy Research

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2146910760

Cites: 7

Cited by: 229

Related to: 10