In this study, we investigate the extent to which corporate investments are responsive to internal and external funds. In particular, we use quantile regression to compare the responsiveness of investments to different funding sources on the entire distribution of investments. Our empirical investigation reveals that internal funds have a greater impact on investments than do external funds irrespective of investment levels. This result holds for different groups of firms classified by proxies for financial constraints and even for firms that raise relatively large amounts of external funds. In contrast, external funds have a greater impact on the amount of liquid assets than do internal funds. Our evidence suggests that internal funds (external funds) are more likely to increase investments (liquid assets). Overall, the observed patterns of investment financing conform to the predictions of the pecking order theory.
JEL Classification: G31, G32
Keywords: corporate investments, internal funds, external funds, pecking order, financial constraints, quantile regression
학회소식
학회소식
[2010년 제 4차] The Sensitivities of Corporate Investments to Inter
작성자 : 관리자
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게시일 :
2010-12-09