Thumbnail Image
Publication

Three Essays on Investment Cashflow Sensitivities and Workforce Dynamics in UK Small and Medium Enterprises (SMEs)

Naeem, Sundas
Citations
Altmetric:
Publication Date
End of Embargo
Supervisor
Akbar, Saeed
Mousavi, Mahdi
Keywords
Financing constraints, Agency cost, Systematic literature review, Investment cashflow sensitivity, VOSViewer, Under-investment, Over-investment, Cashflow uncertainty, Employment growth, Workforce dynamics, UK small and medium enterprises (SMEs)
Rights
Creative Commons License
The University of Bradford theses are licenced under a Creative Commons Licence.
Peer-Reviewed
Open Access status
Accepted for publication
Institution
University of Bradford
Department
School of Management. Faculty of Management, Law and Social Sciences
Awarded
2024
Embargo end date
Collections
Theses
Show all metadata
Files
Thumbnail Image
PhD Thesis
Adobe PDF, 2.85 MB
Additional title
Financing Constraints, Agency Costs, and Abnormal Investment Patterns; Financing Constraints, Cashflow Uncertainty, Investment, and Employment Growth; Financing Constraints and Non-linear Dynamics of Cashflow Uncertainty, Investment, and Employment Growth
Abstract
The thesis aims to extend the understanding of investment cashflow sensitivities and workforce dynamics with the interplay of cashflow uncertainty, agency cost, and financing constraints. It comprises three research essays that conduct an empirical investigation of UK SMEs from 2007 to 2021 using panel data estimation techniques. The first essay reveals the sensitivity of abnormal investments to free cashflows. Specifically, SMEs tend to under-invest when their cashflows are below the optimal level due to financing constraints, and they overinvest when cashflows exceed their optimal level due to agency cost issues. The second essay shows that the negative impact of cashflow uncertainty on employment growth intensifies when SMEs face financing constraints. On the contrary, cashflow uncertainty stimulates investment in tangible assets but starts diminishing as financing constraints become more pronounced. Finally, the third essay shows a non-linear relationship between internal cashflows, uncertainty, and investment in both tangible assets and employment growth. The relationship between internal cashflows and investment in tangible assets shows an inverted U-shaped curve, whereas it follows a U-shaped curve for employment growth. The association between cashflow uncertainty and investment in tangible assets and employment growth follows a U-shaped curve. We further find evidence of an adverse impact of financing constraints on the non-linear associations among the variables. These research findings contribute to the knowledge, providing insights for both researchers and SMEs that allow them to navigate these complexities in decision-making and develop appropriate strategies with the available resources in terms of equity and social capital.
URI
https://bradscholars.brad.ac.uk/handle/10454/20926
Version
Citation
Link to publisher’s version
Link to published version
Link to Version of Record
Type
Thesis
Qualification name
PhD
Notes