THE PROBLEM OF ESTIMATING CAUSAL RELATIONS BY REGRESSING ACCOUNTING (SEMI) IDENTITIES

F. Javier Sánchez Vidal ()
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F. Javier Sánchez Vidal: Universidad Politécnica de Cartagena

Working Papers. Serie EC from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: Inferences about the coefficient values of a model estimated with a linear regression cannot be made when both the dependent and the independent variable are part of an accounting (semi) identity. The coefficients will no longer indicate a causal relation as they must adapt to satisfy the identity. A good example is an investment-cash flow sensitivity model. Este trabajo habla de la imposibilidad de extraer conclusiones sobre el valor de los coeficientes de un modelo de regresión lineal que intenta estimar una relación causal, cuando tanto la variable dependiente como la variable independiente forman parte de una (semi) identidad contable. Los coeficientes no sirven para explicar la relación causal, ya que su valor se adaptará para cumplir la identidad. Como ejemplo ilustrativo se presenta el modelo de la sensibilidad de la inversión al cash-flow.

Keywords: Sensibilidad de la inversión al cash flow; identidades contables; semi-identidades contables Investment-cash flow sensitivities; Accounting identities; Accounting semi-identities (search for similar items in EconPapers)
JEL-codes: B4 G32 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2007-07
New Economics Papers: this item is included in nep-acc
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