Cash flow sensitivity of investment: Evidence from the Polish listed companies

Abstracts

EN

The paper focuses on assessment of the sensitivity of investment on cash flow (ICFS) made by listed companies in Poland. Achieving this goal will also involve analysing and drawing conclusions about the balance-sheet channel of monetary transmission. An empirical part uses data from financial statements for Poland derived from Emerging Markets Information Services (EMIS), related to companies listed on the Warsaw Stock Exchange and NewConnect. Estimations were made using the Ordinary Least Squares method with robust standard errors, and results made it clear that cash flow has a positive significant impact, indicating that most companies operate on the imperfect and incomplete market, and with constrained or costly access to external financing. Further, it is found that the impact is significantly strong in the slowdown, as financial constraints are more binding. These results seem to confirm that the balance-sheet channel of monetary transmission is operative in Poland.

Keywords

EN

investment; cash flow; ICFS; balance sheet channel; financial accelerator

• Publisher: Uniwersytet Warszawski. Wydawnictwo Naukowe Wydziału Zarządzania
• Journal: Central European Economic Journal
• Year: 2020
• Volume: 7
• Issue: 54

Dates

published

2020-10-28

Contributors

other

Marian Nehrebecki

• Faculty of Economic Sciences University of Warsaw

Identifiers

DOI

10.2478/ceej-2020-0009