Investment and growth opportunity between crises and post-crises periods under financing constraint criteria: evidences from Brazilian publicly traded firms

Abstract

This thesis aims to investigate empirically whether there are differences in investments, growth opportunities and cash generation between crises and post-crisis periods for Brazilian firms, classified firms into the criteria of financial constraint. To align with the objective, two hypotheses are constructed. First hypothesis tests the objective in the first paragraph of this abstract, and second hypothesis investigate more deeply whether there are differences of investment to cash flow sensitivity and working capital relation to investment between crises and post-crises for Brazilian firms. The empirical test results of two hypotheses for Brazilian firms do not provide any definite evidences that there are differences of variables and sensitivities in hypotheses between crises and post-crises period as other corporate finance theories argue. Moreover, these indifferences are even greater for financially constrained firms in contrary to expecting sign of this thesis. These result arises from the fact that financially constrained firms in Brazil have a deep financial difficulty and hardly invest at the periods of crises due to credit shortages and this impact continues in post-crises. Brazilian credit crises in the financial market reduce or almost eliminate investment financing. In future studies, it is finally suggested that the results of this research can be compared with other emerging countries.