An empirical research study on investment expenditure & cash flow based on growth differences of listed companies: Evidence from China

Abstract

Healthy growth of listed companies provides great contribution to the development of economy. How reasonable capital expenditures and cash flows are greatly determines the growth of listed companies, and different growing companies have different levels of capital expenditures and cash flows. In constructing growth evaluation model for listed companies in China, from the aspect of growth, this paper conducts an empirical research on; listed companies' growth and capital expenditures, growth and cash flow, and, the relationship between listed companies' growth and capital expenditures. Major findings from the study show that; regardless of the growth level in Chinese listed companies, capital expenditure has a very significant positive effect on cash flow. Also, capital expenditure and cash flow sensitivity is higher in low-growth companies compared to high-growth companies.