CASH-FLOW AND INVESTMENT: A PANEL QUANTILE APPROACH

Umit Koc and Hasan Sahin

MPRA Paper from University Library of Munich, Germany

Abstract: The investment behaviors of firms are affected mainly by financial climate and conditions of economic environment in which they operate. Besides macro variables such as real interest rates, firms carefully evaluate their balance sheet items in their investment decisions. Classic regression analysis provides the possible impact of explanatory variables on the mean value of investment. Although, in some cases, it is very important to know how the mean level of investment is affected by the variables, it could be much more important to know, especially for policy makers, how each quantile of investment is affected by the variables. Based on effects of the variables on quantiles, different policy options can be produced and advised. In this study, a panel quantile regression approach has been used to analyze the effect of real interest rates, currency rates, cash flows and sales on investments by using a data set from Turkey.

Keywords: Cash-flow; investment; fixed-effect; panel quantile; correlated random effect (search for similar items in EconPapers)
JEL-codes: C21 C23 D22 (search for similar items in EconPapers)
Date: 2016-10
New Economics Papers: this item is included in nep-acc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/95939/9/MPRA_paper_95939.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:77437

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