Deciding on large scale investments

This study analyses the importance of investment factors across investment sizes and the frequency of large investment decisions within the firms. We use data from 1442 investment decisions made by 226 Brazilian firms between 1997 and 2010. The results indicate that the influence of investment factors is different for investments of different sizes. The results also indicate that the increase in the frequency of large-scale investment decisions made by the firm influences especially the role of cash flow, diminishing its importance as an investment factor. This result allows one to argue that, probably, firms more experienced in large-scale decisions could be bolder in their decision-making process, relying less on the accumulation of funds through cash flow.