The moderating role of strategy and environment on the relationship between corporate liquidity and investment: evidence from panel data
In order to test the moderating role of corporate strategy and industry environment in the effect of liquidity on investment for Portuguese manufacturing firms, we developed a multiple linear regression model for panel data. It is a static model with three types of variables: financial; strategi...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
University of Algarve, ESGHT/CINTURS
2013-01-01
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| Series: | Tourism & Management Studies |
| Subjects: | |
| Online Access: | https://tmstudies.net/index.php/ectms/article/view/551/953 |
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| Summary: | In order to test the moderating role of corporate strategy and
industry environment in the effect of liquidity on investment
for Portuguese manufacturing firms, we developed a multiple
linear regression model for panel data. It is a static model with
three types of variables: financial; strategic/environmental;
and interactive. The estimated model was validated through
the Breusch-Pagan/Cook-Weisberg and Wald Modified tests
(heteroscedasticity tests), Lagrange Multiplier (industry
random effects test, using the two-digit National Classification
of Economic Activities), Hausman robust test (fixed effects
model vs. random effects model test) and likelihood-ratio test
(joint effect of industry and time test). The statistical
processing of the data revealed that a company’s strategy
(diversification and innovation) and the industry environment
(growth) moderate the effect of liquidity on investment, which
can be explained by the effect of these factors on the cost of
asymmetric information. |
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| ISSN: | 2182-8466 |