Three essays on investment and cash flow; Financial constraint, financial development and uncertainty

In this thesis, the relationship between investment and cash flow is examined under three headings. In the first part of the thesis, it was tried to understand how the sensi-tivity of companies' investment expenditures to cash flows is affected by the financial limitations and export rates. In the second part, it is tried to be understood how the development of capital and money markets affected the sensitivity of investments to cash flows. In the third chapter, it was tried to determine how the uncertainties in global and local sense affect both the investment expenditures and the dependence of investments on cash flows. Data of the investigation is composed of the data of com-panies that are traded on the BIST (Istanbul Stock Exchange) between the years 1996 and 2014. As the data are in the panel data type, analyses were performed by applying dynamic GMM (Generalised Method of Moments) analysis. As a result, it has been found that as the degree of financial constraints of companies and the level of global and local uncertainty increase, dependence of investment expenditures on cash flows strengthen and the level of investments decline. In the second part we were expecting a decline in the dependence of investments on cash flows as capital and money mar-kets evolve, however according to the analysis results we could not surely confirm our expectation. That is to say it is understood that more data is needed to validate or fal-sify the hypothesis of the second part.