Reference : Ownership structure and investment-cash flow sensitivity
Scientific journals : Article
Business & economic sciences : Accounting & auditing
Finance
http://hdl.handle.net/10993/31038
Ownership structure and investment-cash flow sensitivity
English
Derouiche, Imen mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Hassan, Majdi [Defi, ESSEC, Tunis, Tunisie]
Amdouni, Sarra [Defi, ESSEC, Tunis, Tunisie]
2018
Journal of Management & Governance
Springer Science & Business Media B.V.
22
1
31-54
Yes (verified by ORBilu)
International
1385-3457
[en] Ownership structure ; Excess control rights ; Investment-cash flow sensitivity
[en] This study investigates the effect of ownership structure on the use of cash flow in financing corporate investments—the investment-cash flow sensitivity—in a concentrated ownership context. Using a sample of 6797 French listed firms from 2000 to 2013, results show that investment-cash flow sensitivity decreases with the cash-flow rights of the controlling shareholder and increases with the separation of its cash-flow and control rights (excess control rights). Firms are, thus, less likely to use cash flow in investments when the interests of controlling shareholders are aligned with those of minority shareholders. However, they appear to use considerable internal funds for their investments when they have severe agency problems, driven by excess control rights of the controlling shareholders. Overall, our findings help advance the understanding of the role of agency relationship in shaping corporate financial policy.
http://hdl.handle.net/10993/31038
10.1007/s10997-017-9380-x

File(s) associated to this reference

Fulltext file(s):

FileCommentaryVersionSizeAccess
Limited access
10.1007_s10997-017-9380-x.pdfAuthor preprint551 kBRequest a copy

Bookmark and Share SFX Query

All documents in ORBilu are protected by a user license.