Climate-Related Risks and Stock Price Crashes: International Evidence
In: CORFIN-D-23-00843
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In: CORFIN-D-23-00843
SSRN
In: YBARE-D-24-00065
SSRN
In: Emerging markets, finance and trade: EMFT, Band 55, Heft 1, S. 218-235
ISSN: 1558-0938
In: Swiss Finance Institute Research Paper No. 23-80
SSRN
SSRN
In: The Geneva papers on risk and insurance - issues and practice, Band 42, Heft 4, S. 732-756
ISSN: 1468-0440
In: World development: the multi-disciplinary international journal devoted to the study and promotion of world development, Band 141, S. 1-11
World Affairs Online
In: Emerging markets, finance and trade: EMFT, Band 55, Heft 8, S. 1737-1753
ISSN: 1558-0938
In: The journal of financial research: the journal of the Southern Finance Association and the Southwestern Finance Association, Band 43, Heft 2, S. 231-262
ISSN: 1475-6803
AbstractIn this article we investigate the changes in corporate investment dynamics in the aftermath of the global financial crisis. Using firm‐level data from six Latin American countries from 2002 to 2015, we show that firms are less constrained and have greater ability to invest after the crisis. However, the willingness of firms to invest optimally is reduced. This is supported by strong evidence that during the postcrisis period investment–cash flow sensitivity disappears, investment‐q sensitivity increases, and the estimated speeds of adjustment for target investment decrease. Moreover, after the crisis, firms notably increase their efforts to attain optimal cash and leverage levels. Our analysis implies that firms may not always be willing to invest optimally. The willingness to invest optimally appears to be time variant and moves together with the dynamics of cash and leverage policies, albeit in opposite directions.