| Summary: | 碩士 === 國立交通大學 === 經營管理研究所 === 94 === Following the concept Almeida et al. (2004), this study verifies whether a firm’s sensitivity of cash flow to cash could be employed as an indicator to check the existence of financial constraints. The primitive point is that firms’ demands for liquidity are different for financial constraints and non-constraints companies. A constraint company usually has problems in financing from external market, thus it has the propensity to save cash for future usage. It has therefore a positive sensitivity of cash flow to cash. In contrast, a non-constraint company does not have the problems, so that its cash savings may not be systematically related to cash flows.
Taiwan listed electronics corporations are used as the empirical samples. The samples are classified into two groups with four alternative approaches suggested by the literatures: Payout Policy, Ownership Structure, Asset Size, and KZ Index. Whether the sensitivity of cash flow to cash is actually different between the two groups are verified. The empirical results under the Ownership and Asset approaches show that constraint firms’ sensitivities of cash flow to cash are significantly positive, while non-constraint ones are indistinguishable. The results under the Payout and KZ Index approaches do not exactly support theoretical priors. The main reason might be that the classification is not appropriate. Conclusively, we support the concept of Almeida et al. (2004), and the effect of financial constraints could be affected by the sensitivity of cash flow to cash.
|
|---|
