Investigating the relationship between firm investment sensitivity and financing constraints with a distinctive Chinese firm data set
Chen, Siyuan, McIntire School of Commerce, University of Virginia
Chen, Zhaohui, McIntire School of Commerce, University of Virginia
This paper demonstrates the non-monotonic relationship between firm investment-cash flow sensitivity and financial constraint by investigating a moderating variable to this relationship. Through a distinctive Chinese firm dataset, this paper suggests the investment in Chinese real estate as an example that moderates the relationship between investment-cash flow sensitivity and financial constraint. The result confirms a non-monotonic relationship between investment-cash flow sensitivity and financial constraint and encourages further investigation into the presence and the endogeneity of moderating variables between the aforementioned relationships.
BSC (Bachelor of Science in Commerce)
investment-cash flow sensitivity, financial constraint, real estate, China, non-monotonic relationship
Data and R codes available upon request
Global Commerce Scholar