earticle

영어

Recent studies on financial constraints have tried to resolve conflicting views on the relationship between investment-cash flow sensitivities and financial constraints. One remarkable research area in such efforts focuses on the influence of uncertainty on the sensitivities.The purpose of this study is to empirically investigate the effects of uncertainty on investments, investment-cash flow sensitivities, and financial constraints. We explicitly distinguish uncertainty on future project value from that on financing. In order to know the validity of differentiating two types of uncertainty. the sample period is grouped into two periods, before and after the Korean financial crisis in 1997. After the financial crisis, uncertainty on external financing has decreased while that on future project value increased. We apply the conventional panel-data model to the sample of 214 listed Korean manufacturing firms in the period 1992-2003. Important empirical findings of this study can be summarized as follows: (1)We find evidence supporting Kaplan and Zingales' notion that large firms show higher sensitivity than small firms. (2) The sensitivity of investment to cash flow is greater for the before-crisis period than for the after-crisis period, which is consistent with our ex ante expectation. (3) For the after-financial crisis sample, the sensitivity is higher for firms with high liquidity, high leverage, and high dividend payout ratio.