دانلود رایگان مقاله انگلیسی تمرکز بر Q و جریان نقدی - الزویر 2018

Abstract

Investment spending by US public firms is highly concentrated. The 100 largest spenders account for 60% of total capital expenditures and drive most of the variation in aggregate investment. This high concentration creates a disconnect between the average public firm and macroeconomic aggregates. For large firms, cash flow remains the primary driver of investment spending and has not declined in importance as it has for smaller public firms. The cash flowing to big spenders provides a better forecast of future investment opportunities than noisy proxies for Tobin’s q even though these firms are not financially constrained. These results suggest that, at least for the largest spenders, it is unlikely that measurement error drives the significance of cash flow. Our results are also inconsistent with recent models that predict higher investmentcash flow sensitivity for small young growth firms and suggest that cash flow is still the most important determinant of macroeconomic fluctuations in investment spending.

Conclusion

The investment behavior of the very largest corporations is distinct and important. A small number of firms at the top of the size distribution drive most of the variation in aggregate investment. These firms are cash cows. They earn most of the money, pay the lion’s share of dividends and show no signs of being financially constrained. Surprisingly, however, these firms also show the greatest investment sensitivity to cash flows. Further, contrary to previous evidence, this sensitivity has not disappeared over time. This sensitivity of investment in large firms to cash flow has important implications for aggregate investment. Changes in cashflow in large firms predict aggregate investment whereas changes in their stock prices do not. While there is some evidence that small financially constrained firms with low levels of investment are more sensitive to stock prices, these firms make up less than 1% of aggregate investment. Even if stock market prices are driven by irrational behavioral biases that push prices far away from fundamentals for sustained periods of time, it just would not matter much for aggregate investment. Our findings suggest that the cash flow sensitivity of the largest firms is robust to corrections for the significant measurement error in estimates of marginal Tobin’s q. The fact that large spenders display such a robust relation to cash, suggests that measurement error does not explain all the variation in investment intensity for large firms and may reflect a larger economic role for the importance of cash flow in firms’ investment plans. Indeed, we find that the large investment-cash-flow sensitivity of the biggest investing firms appears to be related to realized future investment opportunities. Cash flows are a strong predictor of future investment over the next 10 years. In our tests, current cash flow is a better measure of investment opportunities than poorly measured proxies for average (not marginal) q, which can account for the empirical failure of q in explaining aggregate investment. Overall, our results suggest that future theoretical work should explain the behavior of the top capital spenders to get a better understanding of what drives aggregate investment.