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The Nonmonotonic Investment–Cash Flow Sensitivity and Business Life Cycle: Evidence from An Emerging Market

An Thai & Le Hong Ngoc Ha

Asian Academy of Management Journal of Accounting and Finance2025https://doi.org/10.21315/aamjaf2025.21.1.7article
ABDC C
Weight
0.50

What the paper says

This article aims to investigate the non-linear correlation between investment and cash flow. Drawing on a sample of 669 Vietnamese publicly listed firms from 2010 to 2021, the study tests two hypotheses concerning the investment–cash flow relationship, employing a two-step system-GMM approach. The sensitivity of investment to cash flow is examined across different financial scenarios and business stages. The results demonstrate a U-shaped investment-cash flow relationship, which consistently holds across various firms’ financial positions and ownership structures. Interestingly, this pattern is absent under the influence of the COVID-19 pandemic. When considering the business life cycle, the results indicate that while companies in the introduction and expansion phases exhibit the inverted U-shaped sensitivity, those in the maturity and decline stages display a U-pattern. These outcomes enrich the existing corporate literature and offer significant practical insights for investors, firm managers, and policy-setting parties, particularly within the emerging market context.

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https://doi.org/https://doi.org/10.21315/aamjaf2025.21.1.7

Or copy a formatted citation

@article{an2025,
  title        = {{The Nonmonotonic Investment–Cash Flow Sensitivity and Business Life Cycle: Evidence from An Emerging Market}},
  author       = {An Thai & Le Hong Ngoc Ha},
  journal      = {Asian Academy of Management Journal of Accounting and Finance},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.21315/aamjaf2025.21.1.7},
}

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The Nonmonotonic Investment–Cash Flow Sensitivity and Business Life Cycle: Evidence from An Emerging Market

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.