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Relationship Between Investment and Cash Flow Under High and Low Investment Opportunities: Evidence from Pakistani Manufacturing Firms

International Journal of Management and Information Technology

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Field Value
 
Title Relationship Between Investment and Cash Flow Under High and Low Investment Opportunities: Evidence from Pakistani Manufacturing Firms
 
Creator Salih Memon, Dr Mohammad
Zahid, Imtiaz
Shaikh, Maria
Bashir Shah, Aisha
Khan, Akmal
Muhammd Shaikh, Dr.Faiz
 
Description This paper examines the relationship between cash flow and investment under high and low investment opportunities of 167 Pakistani non-financial manufacturing firms listed in the Karachi Stock Exchange during the period 2004-2013. Tobin’s Q is employed to capture the investment opportunities and sales are taken as control variable.  A panel regression model is used to investigate the relationship of cash flow, Tobin’s Q and sales on investment.  In case of high investment opportunities firms, the relationship of investment and cash flow is positive and significant while under low investment opportunities firms, this relationship is also positive but insignificant.  These results indicate that the high opportunities firms rely mostly on internally generated cash flow whereas the low investment opportunities firms prefer to distribute its earnings as dividend.
 
Publisher CIRWORLD
 
Date 2017-04-15
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://cirworld.com/index.php/ijmit/article/view/6059
10.24297/ijmit.v12i1.6059
 
Source INTERNATIONAL JOURNAL OF MANAGEMENT & INFORMATION TECHNOLOGY; Vol 12 No 1; 3057-3066
2278-5612
 
Language eng
 
Relation https://cirworld.com/index.php/ijmit/article/view/6059/5999
 
Rights Copyright (c) 2017 INTERNATIONAL JOURNAL OF MANAGEMENT & INFORMATION TECHNOLOGY
http://creativecommons.org/licenses/by/4.0