TY  - JOUR
AU  - Kaplan,Steven N.
AU  - Zingales,Luigi
TI  - Investment-Cash Flow Sensitivities are not Valid Measures of Financing Constraints
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7659
PY  - 2000
Y2  - April 2000
UR  - http://www.nber.org/papers/w7659
L1  - http://www.nber.org/papers/w7659.pdf
N1  - Author contact info:
Steven N. Kaplan
Booth School of Business
The University of Chicago
5807 South Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-4513
Fax: 773/702-0458
E-Mail: steven.kaplan@chicagobooth.edu

Luigi Zingales
Booth School of Business
The University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-3196
Fax: 773/834-2081
E-Mail: luigi.zingales@ChicagoBooth.edu
AB  - Kaplan and Zingales [1997] provide both theoretical arguments and empirical evidence that investment-cash flow sensitivities are not good indicators of financing constraints.   Fazzari, Hubbard and Petersen [1999] criticize those findings.  In this note, we explain how the Fazzari et al. [1999] criticisms are either very supportive of the claims in Kaplan and Zingales [1997] or incorrect.   We conclude with a discussion of unanswered questions.
ER  -