The DOI matches its Crossref record; 46 of the 46 references it cites were found in a registry or an index.
Do Measures of Financial Constraints Measure Financial Constraints?
Abstract
Financial constraints are fundamental to empirical research in finance and economics. We propose two tests to evaluate how well measures of financial constraints actually capture constraints. We find that firms typically classified as constrained do not actually behave as if they were constrained: they have no trouble raising debt when their demand for debt increases exogenously and use the proceeds of equity issues to increase payouts to shareholders. Our evidence suggests that extant findings that have been attributed to constraints may instead reflect differences in the growth and financing policies of firms at different stages of their life cycles. Received December 9, 2014; accepted August 18, 2015 by Editor David Denis.
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Cites
Theory of the firm: Managerial behavior, agency costs and ownership structure
Jensen, M. C., & Meckling, W. H. (1976) · Journal of Financial Economics · doi:10.1016/0304-405x(76)90026-x · Cited by 71,491
Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers
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Credit Rationing in Markets with Imperfect Information
Stiglitz, J. E., & Weiss, A. (1981) · Columbia University · doi:10.7916/d8v12ft1 · Cited by 12,769
Financing Constraints and Corporate Investment
Fazzari, S. M., Hubbard, R. G., Petersen, B. C., Blinder, A. S., & Poterba, J. M. (1988) · Brookings Papers on Economic Activity · doi:10.2307/2534426 · Cited by 5,574
New Evidence on Measuring Financial Constraints: Moving Beyond the KZ Index
Hadlock, C. J., & Pierce, J. R. (2010) · Review of Financial Studies · doi:10.1093/rfs/hhq009 · Cited by 5,533
Whited, T. M., & Wu, G. (2006) · Review of Financial Studies · doi:10.1093/rfs/hhj012 · Cited by 3,669
The Cash Flow Sensitivity of Cash
Almeida, H., Campello, M., & Weisbach, M. S. (2004) · The Journal of Finance · doi:10.1111/j.1540-6261.2004.00679.x · Cited by 3,496
Two Agency-Cost Explanations of Dividends
Easterbrook, F. H. (1984) · eYLS (Yale Law School) · Cited by 3,065
Capital structure decisions: Which factors are reliably important?
Frank, M. Z., & Goyal, V. K. (2009) · Financial Management · doi:10.1111/j.1755-053x.2009.01026.x · Cited by 2,859
Bank lending during the financial crisis of 2008
Ivashina, V., & Scharfstein, D. (2010) · Journal of Financial Economics · doi:10.1016/j.jfineco.2009.12.001 · Cited by 2,766
Cited by
Financing Innovation: Evidence from R&D Grants
Howell, S. T. (2017) · American Economic Review · doi:10.1257/aer.20150808 · Cited by 1,138
The effects of financial reporting and disclosure on corporate investment: A review
Roychowdhury, S., Shroff, N., & Verdi, R. S. (2019) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2019.101246 · Cited by 749
Hsu, P.-H., Li, K., & Tsou, C.-Y. (2020) · SSRN Electronic Journal · doi:10.2139/ssrn.3578215 · Cited by 665
HSU, P., LI, K., & TSOU, C. (2023) · The Journal of Finance · doi:10.1111/jofi.13217 · Cited by 658
Employment Protection, Investment, and Firm Growth
Bai, J. (., Fairhurst, D., & Serfling, M. (2020) · The Review of Financial Studies · doi:10.1093/rfs/hhz066 · Cited by 282
Metadata
- Authors
- Farre-Mensa, J., & Ljungqvist, A.
- Venue
- Review of Financial Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 2015-09-03
- Volume
- 29
- Issue
- 2
- Pages
- 271-308
- ISSN
- 0893-9454 (ISSN-L)
- 1465-7368
- OpenAlex
- W2890683563
- Cited by
- 678
- References
- 46
- FWCI
- 145.89
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
