<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The study examines firm’s investment behaviour sensitivity to cash flow before, during and after the recent global financial crisis using the data of 28 firms listed on the Nigerian Stock Market during the period from 2001 to 2012. The contribution of the study to the existing literature rests on using financial crisis as basis for classifying firms as either financially constrained or unconstrained. Employing the panel data and instrumental variable estimation techniques, the study finds that firms’ investment behaviour sensitivity to cash flow was higher during the financial crisis than before or after the financial crisis. In other words, Nigerian firms were highly financially constrained during the last financial crisis.</p></abstract>

The study examines firm’s investment behaviour sensitivity to cash flow before, during and after the recent global financial crisis using the data of 28 firms listed on the Nigerian Stock Market during the period from 2001 to 2012. The contribution of the study to the existing literature rests on using financial crisis as basis for classifying firms as either financially constrained or unconstrained. Employing the panel data and instrumental variable estimation techniques, the study finds that firms’ investment behaviour sensitivity to cash flow was higher during the financial crisis than before or after the financial crisis. In other words, Nigerian firms were highly financially constrained during the last financial crisis.

Firm Financial Status and Investment Behaviour: Evidence from Manufacturing Firms in Nigeria

Department of Economics, Faculty of Economics

Zagreb International Review of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The study examines firm’s investment behaviour sensitivity to cash flow before, during and after the recent global financial crisis using the data of 28 firms...

Firm Financial Status and Investment Behaviour: Evidence from Manufacturing Firms in Nigeria

Published Online: Jun 13, 2019

Page range: 73 - 92

DOI: https://doi.org/10.2478/zireb-2019-0013

Keywords
firms’ investment, cash flow, Tobin’s q, panel data analysis, instrumental variables

© 2019 Alarudeen Aminu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Firm Financial Status and Investment Behaviour: Evidence from Manufacturing Firms in Nigeria

Published Online: Jun 13, 2019

Page range: 73 - 92

DOI: https://doi.org/10.2478/zireb-2019-0013

Keywordsfirms’ investment, cash flow, Tobin’s q, panel data analysis, instrumental variables

© 2019 Alarudeen Aminu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
firms’ investment, cash flow, Tobin’s q, panel data analysis, instrumental variables