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<p>This study examines the impact of corporate governance on investment and investment–cash flow sensitivity (ICFS) across various countries, employing a fixed effect regression model for the period 2014–2021. It includes firms from 22 countries, emphasizing developed and emerging markets, high- and low-governance nations, and large and small enterprises, as well as pre-COVID and post-COVID contexts. The comprehensive results indicate that the corporate governance index positively affects corporate investments across the entire sample. The results, however, differ among the sub-samples categorized by country development, firm size, governance, and the impacts of the COVID pandemic. The beneficial impact of cash flow on corporate investments, both overall and within sub-samples, indicates that corporate investments are sensitive to the firm’s cash flow. This study concludes that corporate governance diminishes the sensitivity of investment to cash flow. The findings are consistent throughout the subsamples. This paper gives vital guidance to corporate boards, policymakers, investors, and academics by analyzing the impact of corporate governance on ICFS across various institutional contexts and business sizes, particularly in the pre- and post-COVID-19 periods.</p>

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Corporate governance, cash flow, and investment–cash flow sensitivity: multi-country perspective

  • 期刊论文

  • 发表日期：

    2025年12月6日

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  • Jawahar Kumar,
  • Jitendra Mahakud

摘要

This study examines the impact of corporate governance on investment and investment–cash flow sensitivity (ICFS) across various countries, employing a fixed effect regression model for the period 2014–2021. It includes firms from 22 countries, emphasizing developed and emerging markets, high- and low-governance nations, and large and small enterprises, as well as pre-COVID and post-COVID contexts. The comprehensive results indicate that the corporate governance index positively affects corporate investments across the entire sample. The results, however, differ among the sub-samples categorized by country development, firm size, governance, and the impacts of the COVID pandemic. The beneficial impact of cash flow on corporate investments, both overall and within sub-samples, indicates that corporate investments are sensitive to the firm’s cash flow. This study concludes that corporate governance diminishes the sensitivity of investment to cash flow. The findings are consistent throughout the subsamples. This paper gives vital guidance to corporate boards, policymakers, investors, and academics by analyzing the impact of corporate governance on ICFS across various institutional contexts and business sizes, particularly in the pre- and post-COVID-19 periods.