| dc.description.abstract | This study applies a new approach in estimating the firm’s level investment sensitivity to cash flow to explore the firm characteristics associated with different levels of cash flow sensitivity. In details, the dataset consisting of non-financial Vietnamese firms listed on HOSE and HNX are divided into three groups: positive, negative and insensitive investment cash flow sensitivity. We find a non-monotonic relation among the investment sensitivity to cash flow and firms’ financial conditions and growth opportunities. A large portion of firms based in Vietnam shows a significant positive cash flow sensitivity. They appear to be financially constrained and thus hold the highest amount of cash to spend for capital expenditures. Notably, negative cash flow sensitivity firms are young, small, and have the highest growth potential in the sample. Despite holding a very low asset tangibility and signals for financial constraints, these firms can maintain a high level of leverage to capture their expected economic potentials. | en_US |
