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Title: Is there a underlying shape of the investment cash flow sensitivity Authors:  Leone Leonida - King's College London (United Kingdom) [presenting]
Abstract: The shape of investment cash flow sensitivity (ICFS) with respect to the degree of financing constraints is a controversial issue in corporate finance research. We contribute to resolving this controversy by proposing an analysis of the shape that sidesteps all the uncertainties regarding the scheme used to sort firms according to financing constraints. The evidence suggests that the ICFS is non-monotonic, and the underlying ICFS is inverse basin shaped, regardless of the financing constraints metric. We show that the inverse basin shape encompasses all other shapes documented by previous studies, and it is engendered only by a non-monotonic relation between ICFS and the degree of financing constraints.