Does cash flow affect investment? Evidence from the romanian capital market.

Authors

  • Andriana Putintica Babes-Bolyai University, Cluj-Napoca, Faculty of Economics and Business Administration
  • Carmen Giorgiana Bonaci Babes-Bolyai University, Cluj-Napoca, Faculty of Economics and Business Administration

DOI:

https://doi.org/10.37335/ijek.v1i1.8

Keywords:

Investments, cash flow, financial reporting, panel data, fixed effects

Abstract

Our paper addresses the relation between corporate investments and cash flow. While literature agrees upon the existence of a correlation between the two, its interpretation continues to generate intense debates. We use data from a sample of 125 Romanian listed companies for the 2005-2011 period. Using a fixed effects least squares model we document a positive significant association between investments and cash flow. The results show that a 1% cash flow fluctuation leads to a 0.27% alteration of the planned investments. We therefore add to the literature on a widely debated topic by bringing evidence in the case of Romanian listed companies.

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Published

2013-12-31

How to Cite

Putintica, A., & Bonaci, C. G. (2013). Does cash flow affect investment? Evidence from the romanian capital market. International Journal of Entrepreneurial Knowledge, 1(1). https://doi.org/10.37335/ijek.v1i1.8

Issue

Vol. 1 No. 1 (2013): International Journal of Entrepreneurial Knowledge

Section

Research

License

International Journal of Entrepreneurial Knowledge (ISSN 2336-2960) is published by the Center for International Scientific Research of VŠO and VŠPP in cooperation with the following partners:

  • University College of Business in Prague, Czech Republic
  • University of Entrepreneurship and Law, Prague, Czech Republic
  • School of Business and Administration of the Polytechnic Institute of Setúbal, Portugal
  • Faculty of Operation and Economics of Transport and Communications, University of Zilina, Slovakia
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