The Determinants of Investment Behavior of Saudi Industrial Firms

• Main Author: Soumaya Bechir Hechmi
• Format: Article
• Language: English
• Published: EconJournals 2020-03-01
• Series: International Journal of Economics and Financial Issues
• Online Access: https://econjournals.com/index.php/ijefi/article/view/9233

<p>In this paper, we examine simultaneous relationship between respectively cash flow, dividend yield, debt, firm size and the investment. This research used 51 listed Saudi industrial firms, from 2009-2018. First of all, we have noticed that the CF has a statistically significant and positive effect on investment. Second, the dividend yield rate is negatively correlated with the investment. Third, debt and the firm size have a positive and significant effect on the relationship between investment and cash flow. This finding is not a sign of presence of financial constraints but it means that firms of our sample substitute the distribution of dividends by debts.</p><p><strong>Keywords: </strong>investment behavior<strong>, </strong>investment-cash flow sensitivity, dividend distribution, debt, firm size and financial constraints.</p><p><strong>JEL Classifications: </strong>G31, G32, O16, P330</p><p>DOI: <a href="https://doi.org/10.32479/ijefi.9233">https://doi.org/10.32479/ijefi.9233</a></p>