Relationship Between Investment Cash Flow Sensitivity and The Degree of Financing Constraints on Russian Capital Market

Student: Latifullin Pavel

Supervisor: Anton Valeryevich Tabakh

Educational Programme: Joint HSE-NES Undergraduate Program in Economics (Bachelor)

Year of Graduation: 2017

In this paper I would like to study the relationship of investment cash flow sensitivity and the degree of financial constraints for Russian firms. There are multiple views on this method of evaluation of investment level depending on different proxies of financial constraints, but nevertheless this method is widely used and in many works new modifications of it are researched. Till that day there are no fully valid measures of financial constraints which would show obvious relationship between investment-cash flow sensitivity and financial constraints. In this paper I examine Russian case. Results showed us that there are almost for every tested financial constraints non monotonic relationship. This findings argued about validity of the investment-cash flow sensitivity measure for financial constraints.

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