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Financial constraints and financial crises: The case of Portuguese Listed Companies

Pereira, L. , Silva, A.M.J.N. , Silva, S.N.
ISLA — Instituto Politécnico de Gestão e Tecnologia
International Journal of Financial Research, Volume 9, Issue 2, 2018, pp. 64–75
DOI: 10.5430/ijfr.v9n2p64

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Abstract
The purpose of this study is to analyze the degree of financial constraints faced by the companies included on the Portuguese Stock General Index when accessing to external financing, especially after the beginning and during the most recent financial crisis that affected the world financial markets from 2007. According to this aim, a longitudinal database is collected from the SABI database and was analyzed under panel data methodology. The final sample is panel data of 430 firm-year observations, related to 43 companies, during the period 2006-2015.In line with previous literature, our results provide evidence that the payout ratio is an efficient measure of the degree of financial constraints; companies that pay out less (or no) dividends display higher sensitivity of the investment to the cash flow. Moreover, we also found that the investment sensitivity to cash flow intensifies immediately after and during the most recent financial crisis.

Keywords

#Financial constraints #Financial crisis #dividend payout ratio #dividend policy #investment-cash flow sensitivity #external financing #2008 financial crisis #Portuguese listed companies #Finance #Panel data #cash flow #business #Financial ratio #Dividend

Bibliographic Details

Publication Type Journal article
Publication Year 2018
Journal / Conference / Work International Journal of Financial Research
ISSN 19234031 19234023
Volume / Issue Vol. 9 (2)
Pagination pp. 64–75
Scopus Indexing Indexed source (via SCImago)

ISLA Authors & Affiliations

A
Ana Cláudia Moreira Rodrigues
anarodrigues@iscap.ipp.pt ID: 9A13-EB92-244B
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A
Armando Mendes Jorge Nogueira da Silva
armandosilva@iscap.ipp.pt ID: CB17-C1F4-CC37
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