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Cash Flow and Investment: Evidence from Internal Capital Markets / Owen Lamont.
- Format:
- Book
- Author/Creator:
- Lamont, Owen.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w5499.
- NBER working paper series no. w5499
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Cash Flow and Investment
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1996.
- Summary:
- Using data from the 1986 oil price decrease, I examine the capital expenditures of non-oil subsidiaries of oil companies. I test the joint hypothesis that 1) a decrease in cash/collateral decreases investment, holding fixed the profitability of investment, and 2) the finance costs of different parts of the same corporation are interdependent. The results support this joint hypothesis: oil companies significantly reduced their non-oil investment compared to the median industry investment. The 1986 decline in investment was concentrated in non-oil units that were subsidized by the rest of the company in 1985.
- Notes:
- Print version record
- March 1996.
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