Do financing constraints hinder corporate fixed investment? Evidence from the Amman stock exchange
This research provides new evidence on financing constraints on corporate fixed investment by emphasizing the role of cash holdings as a precautionary source of funds. Applying GMM estimates to a sample of 106 Jordanian firms, the results suggest that firms follow trade-off theory in financing their...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2021-01-01
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| Series: | Cogent Business & Management |
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| Online Access: | http://dx.doi.org/10.1080/23311975.2021.1910161 |
| _version_ | 1819283646959321088 |
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| author | Mohammad A. Khataybeh |
| author_facet | Mohammad A. Khataybeh |
| author_sort | Mohammad A. Khataybeh |
| collection | DOAJ |
| description | This research provides new evidence on financing constraints on corporate fixed investment by emphasizing the role of cash holdings as a precautionary source of funds. Applying GMM estimates to a sample of 106 Jordanian firms, the results suggest that firms follow trade-off theory in financing their investments but are financially constrained. The coefficient of the cash holdings variable appears to be negative in the fixed-investment regression, suggesting that when firms face financing shocks, they draw upon their precautionary cash reserves to smooth the path of their expenditure on fixed assets. |
| first_indexed | 2024-12-24T01:34:48Z |
| format | Article |
| id | doaj.art-d37f3270d299410bb9c89486eda3dd06 |
| institution | Directory Open Access Journal |
| issn | 2331-1975 |
| language | English |
| last_indexed | 2024-12-24T01:34:48Z |
| publishDate | 2021-01-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Business & Management |
| spelling | doaj.art-d37f3270d299410bb9c89486eda3dd062022-12-21T17:22:14ZengTaylor & Francis GroupCogent Business & Management2331-19752021-01-018110.1080/23311975.2021.19101611910161Do financing constraints hinder corporate fixed investment? Evidence from the Amman stock exchangeMohammad A. Khataybeh0The University of JordanThis research provides new evidence on financing constraints on corporate fixed investment by emphasizing the role of cash holdings as a precautionary source of funds. Applying GMM estimates to a sample of 106 Jordanian firms, the results suggest that firms follow trade-off theory in financing their investments but are financially constrained. The coefficient of the cash holdings variable appears to be negative in the fixed-investment regression, suggesting that when firms face financing shocks, they draw upon their precautionary cash reserves to smooth the path of their expenditure on fixed assets.http://dx.doi.org/10.1080/23311975.2021.1910161cash holdingsfinancing constraintsfixed investment |
| spellingShingle | Mohammad A. Khataybeh Do financing constraints hinder corporate fixed investment? Evidence from the Amman stock exchange Cogent Business & Management cash holdings financing constraints fixed investment |
| title | Do financing constraints hinder corporate fixed investment? Evidence from the Amman stock exchange |
| title_full | Do financing constraints hinder corporate fixed investment? Evidence from the Amman stock exchange |
| title_fullStr | Do financing constraints hinder corporate fixed investment? Evidence from the Amman stock exchange |
| title_full_unstemmed | Do financing constraints hinder corporate fixed investment? Evidence from the Amman stock exchange |
| title_short | Do financing constraints hinder corporate fixed investment? Evidence from the Amman stock exchange |
| title_sort | do financing constraints hinder corporate fixed investment evidence from the amman stock exchange |
| topic | cash holdings financing constraints fixed investment |
| url | http://dx.doi.org/10.1080/23311975.2021.1910161 |
| work_keys_str_mv | AT mohammadakhataybeh dofinancingconstraintshindercorporatefixedinvestmentevidencefromtheammanstockexchange |