The Interaction of the Financing and Investment Decisions: Preliminary Results in the Australian Context
In this paper we report preliminary empirical results on the issue of the interaction of the investment and financing decisions in the Australian context. The investigation was implemented on a sample ranging from 144 to 221 firms for the period from 1980/85. Strong support for the hypothesis that investments and dividends are competing uses of funds, implying presence of interaction, is found for two (1983/84, 1984/85) of the five years under study. Work is in train to extend the sample period from five to ten years in order to obtain a reasonable persepctive of the distribution of support/non-support for the link between the investment and financing decisions.
|Date of creation:||01 Jun 1991|
|Date of revision:|
|Publication status:||Published as: Chiarella, C., Pham, T. M., Sim, A. B. and Tan, M. M. L. 1992, "The Interaction of the Financing and Investment Decisions: Preliminary Results in the Australian Context", Asia Pacific Journal of Management, 9(2), pp. 209-229.|
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- Michael S. Long & Ileen B. Malitz, 1985. "Investment Patterns and Financial Leverage," NBER Chapters, in: Corporate Capital Structures in the United States, pages 325-352 National Bureau of Economic Research, Inc.
- Fama, Eugene F, 1974. "The Empirical Relationships Between the Dividend and Investment Decisions of Firms," American Economic Review, American Economic Association, vol. 64(3), pages 304-18, June.
- Higgins, Robert C., 1972. "The Corporate Dividend-Saving Decision," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 7(02), pages 1527-1541, March.
- Fama, Eugene F, et al, 1969. "The Adjustment of Stock Prices to New Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(1), pages 1-21, February.
- Ieuan G. Morgan & Jacques Saint-Pierre, 1978. "Dividend and Investment Decisions of Canadian Firms," Canadian Journal of Economics, Canadian Economics Association, vol. 11(1), pages 20-37, February.
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