| Summary: | 碩士 === 東海大學 === 財務金融學系 === 102 === Most of the past literatures which discussed the research of financial constraints whether affect investment-cash flow sensitivity. Although all of them examined market’s information asymmetry, there are different results about the relationship between financial constraints and investment-cash flow sensitivity. In addition, there are few papers used the off-balance sheets information. The effects between banking relationship and investment-cash flow sensitivity are the most important aims of this paper.
This paper used FHP(1988) as the empirical and fundamental models to evaluate the investment-cash flow sensitivity. In addition, this paper added the concepts of bank relationship into FHP model. Moreover, we considered financial constraints and financial flexibility into the robust test.
The empirical results and this paper’s contributions are following. First, companies who have good banking relationship can reduce the pressures of the internal cash and the investment-cash flow sensitivity. Second, companies with good banking relationship who have financial constraints or who have no financial flexibility can have lower cash flow sensitivity. Third, companies with low financial flexibility can mitigate the effects between banking relationship and investment-cash flow sensitivity.
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