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Cash-Flow And Investment: A Panel Quantile Approach

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  • KOC, Umit
  • SAHIN, Hasan

Abstract

The investment behaviors of firms are affected mainly by financial climate and conditions of economic environment in which they operate. Besides macro variables such as real interest rates, firms carefully evaluate their balance sheet items in their investment decisions. Classic regression analysis provides the possible impact of explanatory variables on the mean value of investment. Although, in some cases, it is very important to know how the mean level of investment is affected by the variables, it could be much more important to know, especially for policy makers, how each quantile of investment is affected by the variables. Based on effects of the variables on quantiles, different policy options can be produced and advised. In this study, a panel quantile regression approach has been used to analyze the effect of real interest rates, currency rates, cash flows and sales on investments by using a data set from Turkey.

Suggested Citation

  • KOC, Umit & SAHIN, Hasan, 2016. "Cash-Flow And Investment: A Panel Quantile Approach," MPRA Paper 77437, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77437
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    File URL: https://mpra.ub.uni-muenchen.de/95939/9/MPRA_paper_95939.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Cash-flow; investment; fixed-effect; panel quantile; correlated random effect;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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