Corporate Investment and Cash-Flow Sensitivity: Evidence from a Jasmin Revolution Period in Tunisian Market

Abstract

This study investigates the impact of financial constraints on investment decisions and corporate cash holding of Tunisian firms over the period of 2003-2013. We will investigate this task in a particular context which is the Jasmine Revolution. Our results show that the investment decisions of firms with financial constraints are significantly sensitive to the availability and the level of internal funds versus unconstrained ones. Generally, our results suggest that financial constraints significantly influence the decisions of Tunisian companies. In particular, these financial constraints are considered more handicapping during negative cash years and after the revolution.