If you are experiencing problems downloading PDF or HTML fulltext, our helpdesk recommend clearing your browser cache and trying again. If you need help in clearing your cache, please click here . Still need help? Email help@ingentaconnect.com

The impact of cross-ownership on the reaction of corporate investment and financing constraints: a panel threshold model

$54.78 plus tax (Refund Policy)

Buy Article:

Abstract:

This paper studies whether or not investment decisions are financially constrained in a cross-ownership system of Taiwan. Different from the financial structure in the USA, subsidiaries in Taiwan are allowed to buy stocks of the parent companies. Hence, the conventional debt-to-equity ratio is inappropriate to divide firms into high and low-debt firms. Instead, a new threshold variable?–?the adjusted debt–equity ratio ( ADE )?–?is employed to divide the sample into high-debt firms and low-debt firms. A panel of 115 Taiwan-listed firms for the period 1991–1997 is used. Evidence supports the cash flow hypothesis and ADE has a notable significant influence on the financial constraints.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840500218786

Affiliations: 1: Department of Money and Banking, National Chengchi University, Mucha, Taipei 116, Taiwan 2: Department of Banking and Finance, National Chi-Nan University, 1 University Rd, Puli, Nantou 545, Taiwan

Publication date: November 10, 2005

More about this publication?
Related content

Share Content

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more