How Sensitive Is Investment to Cash Flow When Financing Is Frictionless

By Aydoğan Alti. 2003

682 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/05237b39fd17edc611ec459f7deb601d81865400

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Citations in the corpus

Financial Constraints, Investment, and the Value of Cash Holdings (2010, neutral): “One explanation of the findings that they offer, favored also by Erickson and Whited (2000) and Alti (2003), is that Tobin’s Q is a noisy proxy for marginal Q.”
Long-Term Effects of a Financial Crisis: Evidence from Cash Holdings of East Asian Firms (2012, background): “To further test whether the increase in cash holdings after the Asian financial crisis is limited to financially constrained firms, we classify the preexisting firms into financially constrained firms and unconstrained firms using firm size, dividend payment, and leverage, following Alti (2003).8 A ”
Firm Growth and Liquidity Constraints: A Dynamic Analysis (2006, background): “On the other hand, Audretsch and Elston (2002) show that medium-sized German firms are more liquidity constrained (in their investment behaviour) than either the smallest or the largest ones. Contrary to Carpenter and Petersen’s (2002) model, this specification is better suited to being applied to a”
Over-investment of free cash flow (2006, background): “More generally, a criticism of the literature examining the relation between investment and cash flow is that finding a positive association may merely indicate that cash flows serve as an effective proxy for investment opportunities (e.g., Alti, 2003).”
Financial Constraints in China: Firm-Level Evidence (2010, neutral): “, 2000 and Allayannis and Muzomdar, 2004) while others are more doubtful (Gomes, 2003 and Alti, 2003). As explained by Harrison et al. (2004), most papers which question this methodology relate more directly to the Q-model of investment rather than the Euler equation model (although some of the crit”
Export incentives, financial constraints, and the (mis)allocation of credit: Micro-level evidence from subsidized export loans (2008, background): “3 See for instance, Poterba (1988) and Alti (2003).”
Why has the investment-cash flow sensitivity declined so sharply? Rising R&D and equity market developments (2009, neutral): “For example, Alti (2003) and Moyen (2004) calibrate models of firms that use debt as a substitute for internal finance.”
The Cash Flow Sensitivity of Cash (2004, positive): “The use of cash—cash flow sensitivities to test for financial constraints sidesteps some of the criticisms that have plagued the interpretation of tests of financial constraints that use investment—cash flow sensitivities (see Gomes (2001) and Alti (2003)).”
Policy Uncertainty and Corporate Investment (2015, neutral): “…has been interpreted as either evidence that financial constraints have a significant effect on investment (Fazzari, Hubbard, and Petersen (1988)) or that cash flows simply pick up expectations about future profitability in a way that Tobin’s Q fails to (Alti (2003), Erickson and Whited (2006)).”
Investment, Uncertainty, and Liquidity (2003, result): “Thus, our conclusion — that observed investment-cashflow sensitivities may indicate little about the severity of financing constraints — also holds for this broader definition of financial constraints and serves as a complementary case to that of Alti (2001) who shows that the observed investment-ca”