The Study of the Effect of Uncertainty on the Sensitivity between Investment and Cash Flow

• Main Authors: Yi-Chun Lin, 林怡君
• Other Authors: Chia-Chung Chan
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/96875518734287527060

碩士 === 東海大學 === 財務金融學系 === 98 === This paper aims to study, under the information asymmetry and agency problems, the effect of investment revenue uncertainty on the sensitivity between investment and cash flow. In addition to develop the theory model to observe the relationship between uncertainty and investment-cash flow sensitivities, and uncertainty may affect investment-cash flow sensitivities through the channel of agency problems. This paper also provides empirical results to confirm the model. The first result shows that investment-cash flow sensitivities will be decreasing in the degree of uncertainty of financially constrained firms. Next, agency problems do not effect investment-cash flow sensitivities significantly. However, the firms with high uncertainty and high agency problems have negative effect to investment-cash flow sensitivities significantly. On the whole, investment uncertainty affect the investment and finance policy of a firm, and this provide another research for the formation reason of financing constraints.