Cash Flow and Investment: Evidence from Internal Capital Markets
利用1986年油价下跌数据，研究石油公司非石油子公司的资本支出，发现现金流减少会降低投资，且公司内部不同部门的融资成本相互依赖。
ABSTRACT Using data from the 1986 oil price decrease, I examine the capital expenditures of nonoil subsidiaries of oil companies. I test the joint hypothesis that 1) a decrease in cash/collateral decreases investment, holding fixed the profitability of investment, and 2) the finance costs of different parts of the same corporation are interdependent. The results support this joint hypothesis: oil companies significantly reduced their nonoil investment compared to the median industry investment. The 1986 decline in investment was concentrated in nonoil units that were subsidized by the rest of the company in 1985.