Artikel
Investment cash flow sensitivity under managerial optimism: New evidence from NYSE panel data firms
Investment cash flow sensitivity constitutes one important block of the corporate financial literature. While it is well documented in standard corporate finance, it is still young under behavioral corporate finance. In this paper, we test the investment cash flow sensitivity among panel data of American industrial firms during 1999-2010. Using Q-model of investment (Tobin, 1969), we construct and introduce a proxy of managerial optimism following Malmendier and Tate (2005a) to show the impact of CEOs’ optimism in the relationship between investment and internal cash flow. Our results report a positive and significant coefficient of investment to cash flow for the full sample. While, on estimations of our model using sub-sample of more and less constrained firms, we find that the sensitivity exists stronger only for totally constrained group. We find also that board characteristics can reduce investment policy's distortions.
- Language
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Englisch
- Bibliographic citation
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Journal: Journal of Economics, Finance and Administrative Science ; ISSN: 2218-0648 ; Volume: 19 ; Year: 2014 ; Issue: 36 ; Pages: 11-18 ; Barcelona: Elsevier España
- Classification
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Wirtschaft
General Economics and Teaching
- Subject
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Managerial optimism
Corporate investment
Investment cash flow sensitivity
Over investment
Underinvestment
Financial constraints
Optimismo empresarial
Inversión empresarial
Sensibilidad de la inversión al flujo de caja
Sobreinversión
Inversión insuficiente
Limitaciones presupuestarias
- Event
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Geistige Schöpfung
- (who)
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Ben Mohamed, Ezzeddine
Fairchild, Richard
Bouri, Abdelfettah
- Event
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Veröffentlichung
- (who)
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Elsevier España
- (where)
-
Barcelona
- (when)
-
2014
- DOI
-
doi:10.1016/j.jefas.2014.04.001
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Ben Mohamed, Ezzeddine
- Fairchild, Richard
- Bouri, Abdelfettah
- Elsevier España
Time of origin
- 2014
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