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Investment-Cash Flow Sensitivity And Financing Constraints: A Study Of Pakistani Business Group Firms

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  • Yasir Mehmood

    (MS-Banking and Finance, department of management sciences, COMSATS University Islamabad-Abbottabad Campus, Pakistan.)

  • Syed Amjad Farid Hasnu

    (Professor, department of management sciences, COMSATS University IslamabadAbbottabad Campus, Pakistan.)

Abstract

A large discrepancy exists on the use of the investment–cash flow sensitivity as a measure of financing constraints of firms. We examine this discrepancy by considering business group affiliated firms in Pakistan. The study includes 58 group affiliated firms and 32 non-group affiliated firms listed on the Karachi Stock Exchange during 2006-2010. Results of OLS and 2SLS shows a positive investment-cash flow sensitivity for business group affiliated firms and negative investment cash flow sensitivity for nongroup affiliated firms. Additional tests accordingly express that investment-cash flow sensitivity of Pakistani group affiliated firms is significantly lower to non-group affiliated firms.

Suggested Citation

  • Yasir Mehmood & Syed Amjad Farid Hasnu, "undated". "Investment-Cash Flow Sensitivity And Financing Constraints: A Study Of Pakistani Business Group Firms," Review of Socio - Economic Perspectives 202052, Reviewsep.
    • Handle: RePEc:aly:journl:202052
    DOI: 10.19275/RSEP078
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    1. Sattar Khan & Yasir Kamal & Shahid Hussain & Muhammad Abbas, 2022. "Corporate governance looking back to look forward in Pakistan: a review, synthesis and future research agenda," Future Business Journal, Springer, vol. 8(1), pages 1-32, December.

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    More about this item

    Keywords

    Investment-Cash flow; 2SLS; Financing constraints; Pakistani Business group Firms;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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