Investment Cash Flow Sensitivity and Managerial Optimism: A Literature Review Via the Classification Scheme Technique

Mohamed, Ezzeddine Ben; Baccar, Amel; Bouri, Abdelfettah

doi:10.2139/ssrn.2240827

Cited by 7 publications

(3 citation statements)

References 30 publications

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“…An excellent literature survey of the determinants of company investments is given in Harris and Raviv (1991), Shleifer and Vishny (1997), Hubbard (1998), and more recently Mohamed et al (2013). The discussion on investment determinants is strongly intertwined with the literature on credit constraints and growth volatility.…”

Section: Literature Reviewmentioning

confidence: 99%

Company Performance, Investment Decision, and Cyclical Sensitivity: A Dynamic Estimation on Company Microdata

Männasoo

Maripuu

2015

Eastern European Economics

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Section: Literature Reviewmentioning

confidence: 99%

Company Performance, Investment Decision, and Cyclical Sensitivity: A Dynamic Estimation on Company Microdata

Männasoo

Maripuu

2015

Eastern European Economics

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“…First, there may be other low-cost financing sources available that would be easy to access as soon as the firm recovers some financial health. When a firm is not too far removed from the least financially constrained situation, its ownermanager may perceive that bank loans, trade credits, and working capital are within his/her reach (Ben Mohamed, Amel, & Bouri, 2013). As long as the venture's financial health recovers to normal levels, possibly even in the next period, they can regain access to these financing sources and continue with their investment projects (Nishihara & Shibata, 2013).…”

Section: Over-optimism Risk-aversion and The Reluctance To Investmentioning

confidence: 99%

The paradox of investment timing in small business: Why do firms invest when it is too late?

Nguyen

2020

Journal of Small Business Management

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This paper aims to tell the "gamble of resurrection" story for small owner-managed firms.Analyzing a set of private firms in Vietnam, we find that firms that are less financially constrained, an increase in the degree of financing constraints leads to a decrease in the use of entrepreneurs' personal capital. However, once critical value of constraints is reached, this relationship reverses. Specifically, deferring investments that would otherwise be in time may result in firms' experiencing such serious financial distress that the entrepreneurs will invest their personal capital to try and maintain their firms' survival even it may be too late.

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“…The literature on the determinants of the financing of investments has emphasized the crucial role played by the extant structure of cash flows and credit constraints-see Harris and Raviv (1991), Shleifer and Vishny (1997) and Hubbard (1998), or more recently Mohamed, Amel, and Bouri (2013) for excellent literature surveys.…”

Section: Introductionmentioning

confidence: 99%

Investments, Credit, and Corporate Financial Distress: Evidence from Central and Eastern Europe

Männasoo

Maripuu

Hazak

2018

Emerging Markets Finance and Trade

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Although they are instrumental for economic development, productivity-enhancing corporate investments may increase the financial vulnerability of companies, especially in an economic and financial crisis. We employ an instrumental probit model with the aim of finding evidence for the investment and credit patterns that led companies into financial distress during the global financial crisis 2009-2010. The company-level micro-data for our study on three Central and East European countries-Hungary, Bulgaria, Romania and two Baltic countries, Latvia and Lithuania-originates from two independent surveys, the Business Environment and Enterprise Performance Survey conducted in 2008 and the Financial Crisis Survey conducted in 2009/2010. Both were carried out jointly by the EBRD and the World Bank. Our results emphasize a substantial adverse impact from investment intensity and debt financing on company financial soundness during a crisis. On top of that, we discover a strong non-linear pattern in the sensitivity of company distress to its investmentfinancing nexus.

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Investment Cash Flow Sensitivity and Managerial Optimism: A Literature Review Via the Classification Scheme Technique

Cited by 7 publications

References 30 publications

Company Performance, Investment Decision, and Cyclical Sensitivity: A Dynamic Estimation on Company Microdata

Company Performance, Investment Decision, and Cyclical Sensitivity: A Dynamic Estimation on Company Microdata

The paradox of investment timing in small business: Why do firms invest when it is too late?

Investments, Credit, and Corporate Financial Distress: Evidence from Central and Eastern Europe

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