Investment-cash flow sensitivities are not valid measures of financing constraints

Authors
Kaplan, SN Zingales, L
Citation
Sn. Kaplan et L. Zingales, Investment-cash flow sensitivities are not valid measures of financing constraints, Q J ECON, 115(2), 2000, pp. 707-712
Citations number
8
Categorie Soggetti
Economics
Journal title
QUARTERLY JOURNAL OF ECONOMICS
ISSN journal
00335533 → ACNP
Volume
115
Issue
2
Year of publication
2000
Pages
707 - 712
Database
ISI
SICI code
0033-5533(200005)115:2<707:IFSANV>2.0.ZU;2-9
Abstract
Work by Kaplan and Zingales provides both theoretical arguments and empiric al evidence that investment-cash flow sensitivities are not good indicators of financing constraints. Fazzari, Hubbard, and Petersen [this Journal] cr iticize those findings. In this note we explain how the Fazzari et al. crit icisms are either very supportive of the claims in earlier work by Kaplan a nd Zingales or incorrect. We conclude with a discussion of unanswered quest ions.