IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v18y2025i6p312-d1673212.html
   My bibliography  Save this article

CEO Personal Characteristics and Investment-Cash Flow Sensitivity: An Analysis of Indian Independent (Non-Business-Group-Affiliated) Firms and Business Group-Affiliated Firms

Author

Listed:
  • Gaurav Gupta

    (Finance and Accounting, FORE School of Management, New Delhi 110016, India)

Abstract

This study investigates the relationship between the CEO characteristics and investment–cash flow sensitivity ( ICFS ) of Indian manufacturing firms. By using the GMM technique, this study finds that CEO characteristics reduce ICFS . Further, this study examines the moderating role of business group-affiliated firms, independent firms (non-business group-affiliated firms), and firm size on the relationship between CEO characteristics and ICFS . The results reveal that group affiliation moderates the effectiveness of CEO characteristics in reducing ICFS . In addition to this, independent firms rely more heavily on the individual capabilities of CEOs to overcome financial constraints and mitigate ICFS , whereas group firms benefit from structural advantages that diminish the relative impact of CEO characteristics on ICFS . Additionally, this study finds that firm size also moderates the relationship between CEO characteristics and ICFS . The results reveal that CEO characteristics significantly reduce ICFS , with a more pronounced effect in small-sized independent firms compared to their larger counterparts. However, in group-affiliated firms, CEO characteristics have a minimal effect on ICFS , and this impact remains consistent across small and large group firms. These findings offer valuable insights for firms, lending institutions, and investors, emphasizing the role of CEO characteristics in shaping financial decision making, especially in independent and smaller firms.

Suggested Citation

  • Gaurav Gupta, 2025. "CEO Personal Characteristics and Investment-Cash Flow Sensitivity: An Analysis of Indian Independent (Non-Business-Group-Affiliated) Firms and Business Group-Affiliated Firms," JRFM, MDPI, vol. 18(6), pages 1-19, June.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:6:p:312-:d:1673212
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/18/6/312/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/18/6/312/
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:18:y:2025:i:6:p:312-:d:1673212. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.