دانلود رایگان مقاله انگلیسی جریان نقدی و تصمیم در مورد سرمایه گذاری: یک کاربرد در بخش کشاورزی رومانی - الزویر 2018

Abstract

This paper tests the relationship between cash flow and the investment decision of firms from the Romanian agriculture sector. Although the role of cash flow in influencing the investment decision is explained by the financial frictions theory, the investment – cash flow nexus is controversial in empirical investigations. However, only few studies address the bidirectional relationship between the investment decision and the cash flow level. Using a large data set of 739 firms and a panel VAR approach for the period 2006 to 2014, we report a bidirectional causality between investment and cash flow. We find that firm’s cash flow positively influences the level of investment in the next period, and we show therefore that the access to liquidity is important for the investment decision. At the same time, investment in fixed assets enhances the cash flow level only for the subsequent period, but it does not generate a series of cash flows as expected. The results are less conclusive if we use investment dynamics instead of investment level in our empirical analysis.

5. Conclusions

We empirically investigate the investment – cash flow relationship for a set of 739 Romanian firms acting in the agriculture industry. For this purpose, we use a pVAR analysis for the period 2006 to 2014, and we conclude, in line with several previous studies, that the investment – cash flow nexus is controversial.

More precisely, when the level of investment is considered, we obtain a bidirectional causal relationship between investment and cash flow. Our pVAR shows that only the first lag of each variable positively influence the level of the other variable. The impulse response functions show that a shock in CF level is positively transmitted to FTA one period ahead, and has negative impact two periods ahead, pointing in the favor of a non-linear relationship. However, when the investment dynamics is used in our pVAR, we report no significant Granger causality and nonsignificant response to shocks between variables.

From the perspective of financial management of agriculture companies, our results underline the importance of cash flow in sustaining investment in the short run. However, the cash flow (and the associated free cash flow) does not represents a reliable source of investment for multiple periods. Curiously, the investment has a positive impact on cash flow in the next period, but not a significant impact during the subsequent periods.