This paper investigates the relationship between financing constraints and investment-cash flow sensitivities by analyzing firms identified as having unusually high investment-cash flow sensitivities by Fazzari, Hubbard, and Petersen. The authors find that firms that appear less financially constrained exhibit significantly greater sensitivities than those that appear more financially constrained, both for the entire sample period, subperiods, and individual years. This suggests that higher sensitivities do not necessarily indicate financial constraints. The findings challenge the interpretation of previous research that uses this methodology. The paper uses detailed data sources to determine the availability and demand for funds for each firm and ranks the extent of financial constraints. The results are robust to different criteria for dividing firms into constrained and unconstrained groups. The authors provide theoretical reasons and empirical evidence to support their结论, arguing that a greater sensitivity of investment to cash flow is not a reliable measure of the differential cost between internal and external finance.This paper investigates the relationship between financing constraints and investment-cash flow sensitivities by analyzing firms identified as having unusually high investment-cash flow sensitivities by Fazzari, Hubbard, and Petersen. The authors find that firms that appear less financially constrained exhibit significantly greater sensitivities than those that appear more financially constrained, both for the entire sample period, subperiods, and individual years. This suggests that higher sensitivities do not necessarily indicate financial constraints. The findings challenge the interpretation of previous research that uses this methodology. The paper uses detailed data sources to determine the availability and demand for funds for each firm and ranks the extent of financial constraints. The results are robust to different criteria for dividing firms into constrained and unconstrained groups. The authors provide theoretical reasons and empirical evidence to support their结论, arguing that a greater sensitivity of investment to cash flow is not a reliable measure of the differential cost between internal and external finance.