Do financing constraints hinder corporate fixed investment? Evidence from the Amman stock exchange

Artikel

This research provides new evidence on financing constraints on corporate fixed investment by emphasizing the role of cash holdings as a precautionary source of funds. Applying GMM estimates to a sample of 106 Jordanian firms, the results suggest that firms follow trade-off theory in financing their investments but are financially constrained. The coefficient of the cash holdings variable appears to be negative in the fixed-investment regression, suggesting that when firms face financing shocks, they draw upon their precautionary cash reserves to smooth the path of their expenditure on fixed assets.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Cogent Business & Management ; ISSN: 2331-1975 ; Volume: 8 ; Year: 2021 ; Issue: 1 ; Pages: 1-11

Classification and Topics

• Classification: Management ; Portfolio Choice; Investment Decisions ; Corporate Finance and Governance: General ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
• Subject: cash holdings ; financing constraints ; fixed investment ; cash holdings ; financing constraints ; fixed investment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Khataybeh, Mohammad A.
• Event: Veröffentlichung
• (who): Taylor & Francis
• (where): Abingdon
• (when): 2021

Further information

• DOI: doi:10.1080/23311975.2021.1910161
• Handle: http://hdl.handle.net/10419/270264
• Last update: 10.03.2025, 11:43 AM CET