Zeeshan Ahmed, Mubashir Ali Khan, Qasim Saleem, Saira Ihsan
We probe the nexus between value of financial flexibility and investments of non-financial firms listed on Pakistan Stock Exchange over the period 2007-2019. For, this purpose, OLS and fixed effect models are applied to test the relationship while 2SLS and two step systems GMM utilizes for endogeneity concerns. The findings suggested value of financial flexibility based on cash holdings propensity increases the investments. However, market based measure of financial flexibility significantly decreases the level of investments. The results are conclusive across additional tests. It is helpful for finance mangers in the formulation of financial strategies in relation to the controlling and planning of financial decisions. The study attempts to contribute in prior literature by identifying the relationship of value of financial flexibility with investment decisions in a developing country like Pakistan.