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Does firm size matter? Evidence on the impact of liquidity constraints on firm investment behavior in Germany

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  • Audretsch, David B.
  • Elston, Julie Ann

Abstract

This paper examines the link between liquidity constraints and investment behavior for German firms of different sizes from 1970 to 1986. Results indicate that medium sized firms appear to be more liquidity constrained in their investment behavior than either the smallest or largest firms in the study, suggesting that the unique German infrastructure designed to assist the small firm has indeed succeeded in alleviating, to some degree, such liquidity constraints. Findings also support the hypothesis that the emerging competition and internationalism which characterized the German financial markets in the 1980?s, have been improving access to capital for some groups of firms. -- Dieser Beitrag untersucht die Beziehung zwischen Liquiditätsbeschränkungen und Investitionsverhalten deutscher Unternehmen unterschiedlicher Größen im Zeitraum 1970 bis 1986. Die Ergebnisse deuten darauf hin, dass das Investitionsverhalten mittlerer Unternehmen stärker von der Liquiditätsseite her beschränkt ist als das der in der Untersuchung berücksichtigten kleinen und großen Unternehmen. Dies spricht dafür, dass die besondere deutsche Infrastruktur, die auf eine Unterstützung kleiner Unternehmen ausgerichtet ist, derartige Liquiditätsbeschränkungen mit Erfolg in gewissem Maße gelockert hat. Die Ergebnisse unterstützen auch die Hypothese, dass der stärkere Wettbewerb und die Internationalisierung, die die deutschen Finanzmärkte in den achtziger Jahren kennzeichneten, einigen Gruppen von Unternehmen den Zugang zu Kapital verbesserten.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 20 (2002)
Issue (Month): 1 (January)
Pages: 1-17

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Handle: RePEc:eee:indorg:v:20:y:2002:i:1:p:1-17

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Web page: http://www.elsevier.com/locate/inca/505551

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  1. Elston, Julie, 1997. "A Comparison of Empirical Investment Equations using Company Panel Data for France, Germany, Belgium and the UK," Working Papers 981, California Institute of Technology, Division of the Humanities and Social Sciences.
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  10. Elston, J-A, 1997. "Investment, Liquidity Constaints and Bank Relationships : Evidence from German Manufacturing Firms," Papers 17, American Institute for Contemporary German Studies-.
  11. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August.
  12. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
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