/jurnalpengurusan Sat, 08 Oct 2022 18:25:26 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.1 /jurnalpengurusan/article/cash-flow-investment-relationship-in-malaysia-a-panel-threshold-regression-analysis/?utm_source=rss&utm_medium=rss&utm_campaign=cash-flow-investment-relationship-in-malaysia-a-panel-threshold-regression-analysis Sat, 08 Oct 2022 18:25:26 +0000 /jurnalpengurusan/?post_type=article&p=3414 The objective of this article is to analyse the relationship pattern of cash flow-investment among low and high debt firms. To investigate the issue, we employed Hansen’s (1999) threshold method of non-dynamic panel data. In this article, the firm debt ratio was used as threshold variable. A balanced panel data of companies listed on Bursa Malaysia, comprising of 234 companies for a period from 2004 to 2010, was utilized in this study. The results showed that debt ratio has a significant role at explaining the cash flow-investment relationship among firms. In particular, the results showed that low debt firms exhibit significant support to the financial constraints hypothesis, while high debt firms demonstrate support to the free-cash flow hypothesis. This finding explains why the cash flow-investment relationship of certain firms is negative, while other firms are positive. It also signifies the inability of constrained firms to access to external financing; thus, leading the firms to significantly rely on their internal financings.

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