拉斯维加斯9888

Finance Seminar（2015-05）

Topic:Firm Growth Type and the Sensitivity of Investment to Cash Flow

Speaker:Xueping Wu, City University of Hong Kong

Time:Thursday, 26 March, 09:00-10:20

Location:Room 217, Guanghua Building 2

Abstract：This paper shows that investment-to-cash-flow sensitivity (ICFS) reflects firm growth type. We identify a firm’s growth type by the firm’s growth uncertainty or simply asymmetric information about growth (AI). Firms starting with distinct AI’s have persistently distinct investment and financing behaviors. ICFS decreases with initial AI that positively predicts investment style with more R&D intensity and funding policy with more equity than debt. In the growth-type-aligned pattern for external finance, types of asymmetric information matter and growth uncertainty appears to facilitate rather than inhibit equity financing. These findings do not support the notion that informational imperfection typically imposes financial constraints.