Research question


Main findings

Balfoussia and Gibson, (2016) [10]

・ Explore whether the sensitivity of firm-level investment to cash-flow, typically associated with an external financing premium, is time-varying and in particular whether it varies with overall financial conditions.

・ Sample of 2400 listed companies in EU for period of 1980 to 2013.

・ Financial conditions have indeed played a significant role in corporate investment decisions over recent years, rendering financing constraints even more binding.

・ The impact of credit conditions is not uniform across firms, but rather it varies depending on firm size and leverage, with constrained firms being substantially more likely to condition their investment decisions on overall credit conditions.

Boumediene, Nafti, and Boumediene, (2014) [9]

・ Test the impact of the financial crisis on the informational content of accounting numbers.

・ Sample of 220 firm year observations on the French stock market and periods 2006-2007 and 2009-2011.

・ The 2008 financial crisis contributed to reducing the information content of accounting numbers due to lack of confidence created by investors towards the information published on the basis of international standards.

Campello, Giambona, Graham, and Harvey (2012) [8]

・ examine how firms in Europe used credit lines during the financial crisis.

・ Two surveys at approximately 10,500 e-mail invitations to CFOs in Europe and North America. At survey 1 in 2009 Q1 responded 580 and at survey 2 in 2009 Q2 responded 565.

・ Firms with restricted access to credit (small, private, non-investment-grade, and unprofitable) draw more funds from their credit lines during the crisis than their large, public, investment- grade, profitable counterparts.

・ Interest spreads increased (especially in “market-based economies”), but commitment fees remained unchanged.

・ Credit lines did not dry up during the crisis and provided the liquidity that firms used to cope with this exceptional contraction.

・ Credit lines provided the liquidity companies needed to invest during the crisis.

Doukakis, Kapellas and Siougle (2017) [11]

・ Examine the impact of IFRS adoption on investment decisions in Europe

・ Examine if the impact of IFRS on investment decision differentiates under adverse economic conditions i.e. crisis period

・ Sample of 18 European countries. Study period 2000-2012. Total sample 0f 1480 sample firms; 341 voluntary adopting firms and 1139 mandatory adopting firms

・ The financial reporting practices of mandatory versus voluntary adopters cause significant differences in (a) the cost of equity capital, (b) the level of capital investments and (c) the return on invested capital.

・ These evidence are more pronounced under the strong legal enforcement environment

・ During the crisis period the cost of equity capital was increased for both voluntary and mandatory adopters. Both groups seem to keep their investment policy unchanged even under adverse economic conditions