Cash flow-investment relationship in Malaysia: a panel threshold regression analysis
The objective of this article is to analyse the relationship pattern of cash flow-investment among low and high debt firms. To investigate the issue, we employed Hansen’s (1999) threshold method of non-dynamic panel data. In this article, the firm debt ratio was used as threshold variable. A bala...
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Penerbit Universiti Kebangsaan Malaysia
2015
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| Online Access: | http://journalarticle.ukm.my/9607/ http://journalarticle.ukm.my/9607/ http://journalarticle.ukm.my/9607/1/12179-33189-1-SM.pdf |
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ukm-96072016-12-14T06:50:26Z http://journalarticle.ukm.my/9607/ Cash flow-investment relationship in Malaysia: a panel threshold regression analysis Mohd Adib Ismail, Mawar Murni Yunus, The objective of this article is to analyse the relationship pattern of cash flow-investment among low and high debt firms. To investigate the issue, we employed Hansen’s (1999) threshold method of non-dynamic panel data. In this article, the firm debt ratio was used as threshold variable. A balanced panel data of companies listed on Bursa Malaysia, comprising of 234 companies for a period from 2004 to 2010, was utilized in this study. The results showed that debt ratio has a significant role at explaining the cash flow-investment relationship among firms. In particular, the results showed that low debt firms exhibit significant support to the financial constraints hypothesis, while high debt firms demonstrate support to the free-cash flow hypothesis. This finding explains why the cash flow-investment relationship of certain firms is negative, while other firms are positive. It also signifies the inability of constrained firms to access to external financing; thus, leading the firms to significantly rely on their internal financings. Penerbit Universiti Kebangsaan Malaysia 2015 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/9607/1/12179-33189-1-SM.pdf Mohd Adib Ismail, and Mawar Murni Yunus, (2015) Cash flow-investment relationship in Malaysia: a panel threshold regression analysis. Jurnal Pengurusan, 45 . pp. 1-17. ISSN 0127-2713 http://ejournal.ukm.my/pengurusan/issue/view/749 |
| repository_type |
Digital Repository |
| institution_category |
Local University |
| institution |
Universiti Kebangasaan Malaysia |
| building |
UKM Institutional Repository |
| collection |
Online Access |
| language |
English |
| description |
The objective of this article is to analyse the relationship pattern of cash flow-investment
among low and high debt firms. To investigate the issue, we employed Hansen’s (1999)
threshold method of non-dynamic panel data. In this article, the firm debt ratio was used as
threshold variable. A balanced panel data of companies listed on Bursa Malaysia,
comprising of 234 companies for a period from 2004 to 2010, was utilized in this study. The
results showed that debt ratio has a significant role at explaining the cash flow-investment
relationship among firms. In particular, the results showed that low debt firms exhibit
significant support to the financial constraints hypothesis, while high debt firms demonstrate
support to the free-cash flow hypothesis. This finding explains why the cash flow-investment
relationship of certain firms is negative, while other firms are positive. It also signifies the
inability of constrained firms to access to external financing; thus, leading the firms to
significantly rely on their internal financings. |
| format |
Article |
| author |
Mohd Adib Ismail, Mawar Murni Yunus, |
| spellingShingle |
Mohd Adib Ismail, Mawar Murni Yunus, Cash flow-investment relationship in Malaysia: a panel threshold regression analysis |
| author_facet |
Mohd Adib Ismail, Mawar Murni Yunus, |
| author_sort |
Mohd Adib Ismail, |
| title |
Cash flow-investment relationship in Malaysia: a panel threshold
regression analysis |
| title_short |
Cash flow-investment relationship in Malaysia: a panel threshold
regression analysis |
| title_full |
Cash flow-investment relationship in Malaysia: a panel threshold
regression analysis |
| title_fullStr |
Cash flow-investment relationship in Malaysia: a panel threshold
regression analysis |
| title_full_unstemmed |
Cash flow-investment relationship in Malaysia: a panel threshold
regression analysis |
| title_sort |
cash flow-investment relationship in malaysia: a panel threshold
regression analysis |
| publisher |
Penerbit Universiti Kebangsaan Malaysia |
| publishDate |
2015 |
| url |
http://journalarticle.ukm.my/9607/ http://journalarticle.ukm.my/9607/ http://journalarticle.ukm.my/9607/1/12179-33189-1-SM.pdf |
| first_indexed |
2023-09-18T19:55:21Z |
| last_indexed |
2023-09-18T19:55:21Z |
| _version_ |
1777406492027125760 |