We show that firms collect more than 70% of their cash flow in the second half of the fiscal year, and firms that collect more cash by year-end earn a 6% higher per annum risk premium and save more cash. We rationalize these facts in a quantitative investment-based asset pricing model. Immediate...

The investment-cash flow sensitivity (ICFS) of Chinese firms declined during the global financial crisis, which contradicts the conventional financial constraint interpretation of ICFS. We analyze this phenomenon by examining how cash flow uncertainty affects the ways of financing investment. We...

Firms have different choices of using equity issuance and cash flow to save. Empirically, we find three differences between savings from equity issuance and cash flow. First, firms may not increase or decrease the savings rates of equity issuance and cash flow at the same time. Second, the...

The investment-cash flow sensitivity (ICFS) of Chinese firms declined during the global financial crisis, which contradicts the conventional financial constraint interpretation of ICFS. We analyze this phenomenon by examining how cash flow uncertainty affects the ways of financing investment. We...