The Determinants of Investment Behavior of Saudi Industrial Firms

Soumaya Bechir Hechmi
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Soumaya Bechir Hechmi: Meehan School of Business, Stonehill College, North Easton, MA, USA.

International Journal of Economics and Financial Issues, 2020, vol. 10, issue 2, 203-208

Abstract: In this paper, we examine simultaneous relationship between respectively cash flow, dividend yield, debt, firm size and the investment. This research used 51 listed Saudi industrial firms, from 2009-2018. First of all, we have noticed that the CF has a statistically significant and positive effect on investment. Second, the dividend yield rate is negatively correlated with the investment. Third, debt and the firm size have a positive and significant effect on the relationship between investment and cash flow. This finding is not a sign of presence of financial constraints but it means that firms of our sample substitute the distribution of dividends by debts.

Keywords: investment behavior; investment-cash flow sensitivity; dividend distribution; debt; firm size and financial constraints. (search for similar items in EconPapers)
JEL-codes: G31 G32 O16 P33 (search for similar items in EconPapers)
Date: 2020
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