The Effect of Debt, Firm Size and Liquidity on Investment -Cash Flow Sensitivity

Hechmi Soumaya

Abstract


Given the importance of cash flow, being in determining the investment performance of firms, we have presented an overview of purely practical studies that analyze this relationship. The majority of these studies have proven the existence of such relationship, both significant and positive, between investment and the CF, but the unanimity has not explained this positive relationship.

We are interested only in analyzing the effect of the debt, liquidity and firm size on the investment-cash flow sensitivity on a sample of 82 French firms that compose the SBF 250 index, from 1999 to 2005. Thus, we have noticed that the debt has a negative effect on the investment-cash flow sensitivity and the firm size has a positive effect on this relationship.

Full Text:

PDF


DOI: https://doi.org/10.5296/ijafr.v2i2.2064

Refbacks

  • There are currently no refbacks.


Copyright (c) 2012 Hechmi Soumaya

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

International Journal of Accounting and Financial Reporting  ISSN 2162-3082

Copyright © Macrothink Institute 

'Macrothink Institute' is a trademark of Macrothink Institute, Inc.

To make sure that you can receive messages from us, please add the 'macrothink.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.