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Determinants of Intercorporate Investments: An Empirical Investigation of Indian Firms

Indian Institute of Management Lucknow, Prabandh Nagar, Off-Sitapur Road, Lucknow (UP) 226013, India
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Int. J. Financial Stud. 2021, 9(1), 1; https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010001
Received: 19 September 2020 / Revised: 11 December 2020 / Accepted: 14 December 2020 / Published: 22 December 2020
We examine the determinants of intercorporate investments for a sample of 127 firms listed in the National Stock Exchange (NSE) in India for the period 2015–2019. This research indicates that the investor firm’s intercorporate investments are influenced by free cash flows, dividend yield, promoter holding, and leverage. Interestingly, contrary to anecdotes in the financial press, the investor firms where promoter holding (equity) is more, prefer to invest less in the other firm’s capital (as part of intercorporate investment). Using OLS regression, this analysis does not find evidence for the variables, that is, the firm’s age, the capital expenditure required, growth in earnings per share, board independence, and CEO duality for significant influence on intercorporate investments. Further tests for industry effect reveal the consumer and retail sector’s intercorporate investments to be significantly different (i.e., lower) from the manufacturing and service sectors. View Full-Text
Keywords: intercorporate investments; free cash flows; leverage; capital expenditure; board independence; earnings per share intercorporate investments; free cash flows; leverage; capital expenditure; board independence; earnings per share
MDPI and ACS Style

Saxena, V.; Sahoo, S. Determinants of Intercorporate Investments: An Empirical Investigation of Indian Firms. Int. J. Financial Stud. 2021, 9, 1. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010001

AMA Style

Saxena V, Sahoo S. Determinants of Intercorporate Investments: An Empirical Investigation of Indian Firms. International Journal of Financial Studies. 2021; 9(1):1. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010001

Chicago/Turabian Style

Saxena, Vedika, and Seshadev Sahoo. 2021. "Determinants of Intercorporate Investments: An Empirical Investigation of Indian Firms" International Journal of Financial Studies 9, no. 1: 1. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010001

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