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Does macro-economy have any effect on firm investment-cash flow sensitivities?

—An empirical study based on panel data, 1993–2004

  • Research Article
  • Published:
Frontiers of Economics in China

Abstract

We conduct an empirical study on Chinese listed firms’ investment-cash flow sensitivities in different stages of the macroeconomic cycle during 1993–2004, and find that macro-economy has a significant effect on investment-cash flow sensitivities. When economic slowdown occurred between 1998 and 2001, sample firms reduced working capital substantially to maintain some necessary investment level of fixed assets, that is, firms stabilized fixed assets investment by adjusting working capital. However, the sensitivity coefficients of fixed assets investment to cash or sales revenue were not systematically higher in the depressed stage than in the booming stage.

摘要

对1993–2004年的上市公司投资现金流敏感性进行实证研究, 发现宏观经济运行对企业投资现金流敏感性有显著影响。 还发现样本公司在经济不景气的1998–2001年阶段, 为了保持一定水平的固定资产投资, 大幅度减少营运资本, 即通过调整营运资本水平来使固定资产投资平滑化, 而经济不景气阶段企业固定投资对现金和销售收入的敏感性系数并没有系统性地高于经济景气的阶段。

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Authors and Affiliations

  1. School of International Business, Beijing Foreign Studies University, Beijing, 100089, China

    Ying Weiwei

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  1. Ying Weiwei
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Correspondence to Ying Weiwei.

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Ying, W. Does macro-economy have any effect on firm investment-cash flow sensitivities?. Front. Econ. China 2, 388–403 (2007). https://doi.org/10.1007/s11459-007-0020-2

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  • DOI: https://doi.org/10.1007/s11459-007-0020-2

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