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Investment Decision and Financial Constraints: Empirical Study on Indonesian Stock Exchange

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  • Riskin Hidayat

    (Gadjah Mada University)

Abstract

This research aims to test the sensitivity level of liquidity and invesment opportunity to invesment decision between non-financially constrained and financially constrained firms. Sample in this research is the firm of non finance which enlist in Indonesia Stock Exchange from period 2003 to 2007, obtained sample 136 firms with 680 observations. Result of research refer that liquidity and invesment opportunity have an influence on positive to invesment decision. Liquidity is more sensitive to invesment decision for financially constrained firms. Invesment opportunity is more sensitive to invesment decision for non financially constrained.

Suggested Citation

  • Riskin Hidayat, 2010. "Investment Decision and Financial Constraints: Empirical Study on Indonesian Stock Exchange," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 12(4), pages 425-446, April.
    • Handle: RePEc:idn:journl:v:12:y:2010:i:4f:p:425-446
    DOI: ttps://doi.org/10.21098/bemp.v12i4.379
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Investment decision; liquidity; financially constraint;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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