This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Financing and investment interdependencies in unquoted Belgian companies: the role of venture capital Author info | Abstract | Publisher info | Download info | Related research | Statistics Sophie Manigart ()
Katleen Baeyens
Ilse Verschueren (Vlerick Leuven Gent Management School)
Additional information is available for the following
registered author(s):
There is ample empirical evidence that investments in (public) companies are correlated with cash flow. This may either be explained as evidence of financing constraints (Fazzari, Hubbard and Petersen, 1988), as excessive conservatism by managers, restraining investments to the internally generated cash flow (Kaplan and Zingales, 2000). We test the investment-cash flow sensitivity in unquoted Belgian companies with a modified sales accelerator model, using unbalanced panel data and GMM techniques. We show that investments in tangible fixed assets are positively related to cash flow. Contrary to our expectations, this sensitivity is not reduced, but it increases, when companies receive venture capital. We interpret the results as evidence of the presence of financing constraints and underinvestment problems in unquoted companies. Venture capital intermediaries are not able to eliminate financing constraints in Belgian unquoted companies.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page . Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Paper provided by Vlerick Leuven Gent Management School in its series Vlerick Leuven Gent Management School Working Paper Series with number
2002-16.
Download reference. The following formats are available: HTML
(with abstract ),
plain text
(with abstract ),
BibTeX ,
RIS (EndNote, RefMan, ProCite),
ReDIF
Length: 38 pages
Date of creation: 27 Jun 2002Date of revision:
Handle: RePEc:vlg:vlgwps:2002-16Contact details of provider: Postal: Reep 1, 9000 Gent Phone: +32 9 210 98 99 Fax: +32 9 210 97 00 Email: Web page: http://www.vlerick.com More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Isabelle Vandenbroere).
Keywords: Other versions of this item:
This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Jensen, Michael C, 1986.
"Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers ,"
American Economic Review ,
American Economic Association, vol. 76(2), pages 323-29, May.
[Downloadable!] (restricted)
Steven N. Kaplan & Luigi Zingales, 1995.
"Do Financing Constraints Explain Why Investment is Correlated with Cash Flow? ,"
NBER Working Papers
5267, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Megginson, William L & Weiss, Kathleen A, 1991.
" Venture Capitalist Certification in Initial Public Offerings ,"
Journal of Finance ,
American Finance Association, vol. 46(3), pages 879-903, July.
[Downloadable!] (restricted)
Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984.
"Corporate financing and investment decisions when firms have information that investors do not have ,"
Working papers
1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
[Downloadable!]
Steven N. Kaplan & Luigi Zingales, 2000.
"Investment-Cash Flow Sensitivities are not Valid Measures of Financing Constraints ,"
NBER Working Papers
7659, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Stewart C. Myers & Nicholas S. Majluf, 1984.
"Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have ,"
NBER Working Papers
1396, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Zsuzsanna Fluck & Douglas Holtz-Eakin & Harvey S. Rosen, 1998.
"Where Does the Money Come From? The Financing of Small Entrepreneurial Enterprises ,"
New York University, Leonard N. Stern School Finance Department Working Paper Seires
98-038, New York University, Leonard N. Stern School of Business-.
Myers, Stewart C. & Majluf, Nicholas S., 1984.
"Corporate financing and investment decisions when firms have information that investors do not have ,"
Journal of Financial Economics ,
Elsevier, vol. 13(2), pages 187-221, June.
[Downloadable!] (restricted)
Titman, Sheridan & Wessels, Roberto, 1988.
" The Determinants of Capital Structure Choice ,"
Journal of Finance ,
American Finance Association, vol. 43(1), pages 1-19, March.
[Downloadable!] (restricted)
R. Glenn Hubbard, 1998.
"Capital-Market Imperfections and Investment ,"
Journal of Economic Literature ,
American Economic Association, vol. 36(1), pages 193-225, March.
[Downloadable!] (restricted)
Other versions: Allen N. Berger & Gregory F. Udell, 1998.
"The economics of small business finance: the roles of private equity and debt markets in the financial growth cycle ,"
Finance and Economics Discussion Series
1998-15, Board of Governors of the Federal Reserve System (U.S.).
[Downloadable!]
Other versions: Steven Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1988.
"Financing Constraints and Corporate Investment ,"
NBER Working Papers
2387, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Bond, Stephen & Meghir, Costas, 1994.
"Dynamic Investment Models and the Firm's Financial Policy ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 61(2), pages 197-222, April.
[Downloadable!] (restricted)
Other versions: Maier, John II & Walker, David A., 1987.
"The role of venture capital in financing small business ,"
Journal of Business Venturing ,
Elsevier, vol. 2(3), pages 207-214.
[Downloadable!] (restricted)
Amit, Raphael & Brander, James & Zott, Christoph, 1998.
"Why do venture capital firms exist? theory and canadian evidence ,"
Journal of Business Venturing ,
Elsevier, vol. 13(6), pages 441-466, November.
[Downloadable!] (restricted)
Admati, Anat R & Pfleiderer, Paul, 1994.
" Robust Financial Contracting and the Role of Venture Capitalists ,"
Journal of Finance ,
American Finance Association, vol. 49(2), pages 371-402, June.
[Downloadable!] (restricted)
Jacques Mairesse & Bronwyn H. Hall & Benoit Mulkay, 1999.
"Firm-Level Investment in France and the United States: An Exploration of What We Have Learned in Twenty Years ,"
NBER Working Papers
7437, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Hall, B. & Mairesse, J. & Mulkay, B., 1998.
"Firm-Level Investment in France and the United States: An Exploration of What We Have Learned in Twenty Years ,"
Economics Papers
143, Economics Group, Nuffield College, University of Oxford.
Bronwyn H. Hall & Jacques Mairesse & Benoit Mulkay, 1998.
"Firm-level investment in France an the United States: an exploration of what we have learned in twenty years ,"
IFS Working Papers
W98/10, Institute for Fiscal Studies.
Bronwyn H. Hall, Jacques Mairesse and Benoit Mulkay., 1998.
"Firm Level Investment in France and the United States: An Exploration of What We Have Learned in Twenty Years ,"
Economics Working Papers
98-261, University of California at Berkeley.
[Downloadable!] Bronwyn H. Hall & Jacques Mairesse & Benoit Mulkay & Jacques Mairesse, 1999.
"Firm Level Investment in France and the United States: An Exploration of What We Have Learned in Twenty Years ,"
Econometrics
9902001, EconWPA.
[Downloadable!] Bronwyn H. Hall & Jacques Mairesse & Benoît Mulkay, 1999.
"Firm-Level Investment in France and the United States: An Exploration of What We Have Learned in Twenty Years ,"
Annales d'Economie et de Statistique ,
ADRES, issue 55-56, pages 03, Juillet-D.
[Downloadable!] Gavin C Reid, 1994.
"Fast Growing Small Entrepreneurial Firms and their Venture Capital Backers: an Applied Principal-Agent Analysis ,"
CRIEFF Discussion Papers
9421, Centre for Research into Industry, Enterprise, Finance and the Firm.
[Downloadable!]
Other versions: Steve Bond & Costas Meghir, 1994.
"Financial constraints and company investment ,"
Fiscal Studies ,
Institute for Fiscal Studies, vol. 15(2), pages 1-18, May.
[Downloadable!]
Gompers, Paul A, 1995.
" Optimal Investment, Monitoring, and the Staging of Venture Capital ,"
Journal of Finance ,
American Finance Association, vol. 50(5), pages 1461-89, December.
[Downloadable!] (restricted)
Hausman, Jerry A, 1978.
"Specification Tests in Econometrics ,"
Econometrica ,
Econometric Society, vol. 46(6), pages 1251-71, November.
[Downloadable!] (restricted)
Stiglitz, Joseph E & Weiss, Andrew, 1981.
"Credit Rationing in Markets with Imperfect Information ,"
American Economic Review ,
American Economic Association, vol. 71(3), pages 393-410, June.
[Downloadable!] (restricted)
Rajan, Raghuram G, 1992.
" Insiders and Outsiders: The Choice between Informed and Arm's-Length Debt ,"
Journal of Finance ,
American Finance Association, vol. 47(4), pages 1367-400, September.
[Downloadable!] (restricted)
Sapienza, Harry J. & Manigart, Sophie & Vermeir, Wim, 1996.
"Venture capitalist governance and value added in four countries ,"
Journal of Business Venturing ,
Elsevier, vol. 11(6), pages 439-469, November.
[Downloadable!] (restricted)
Ooghe, Hubert & Manigart, Sophie & Fassin, Yves, 1991.
"Growth patterns of the European venture capital industry ,"
Journal of Business Venturing ,
Elsevier, vol. 6(6), pages 381-404, November.
[Downloadable!] (restricted)
Lerner, Josh, 1999.
"The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program ,"
Journal of Business ,
University of Chicago Press, vol. 72(3), pages 285-318, July.
[Downloadable!] (restricted)
repec:wuk:andedp:9616 is not listed on IDEAS
Hines, James R, Jr & Thaler, Richard H, 1995.
"The Flypaper Effect ,"
Journal of Economic Perspectives ,
American Economic Association, vol. 9(4), pages 217-26, Fall.
[Downloadable!] (restricted)
Goergen, Marc & Renneboog, Luc, 2001.
"Investment policy, internal financing and ownership concentration in the UK ,"
Journal of Corporate Finance ,
Elsevier, vol. 7(3), pages 257-284, September.
[Downloadable!] (restricted)
Other versions:
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Joachim Keller, 2008.
"Agency problems in structured finance – a case study of European CLOs ,"
Documents series
200808-22, National Bank of Belgium.
[Downloadable!]
Philippe Moës, 2008.
"Multivariate structural time series models with dual cycles : implications for measurement of output gap and potential growth ,"
Research series
200808-20, National Bank of Belgium.
[Downloadable!]
Philippe Moës, 2006.
"The production function approach to the Belgian output gap, Estimation of a Multivariate Structural Time Series Model ,"
Research series
200609-1, National Bank of Belgium.
[Downloadable!]
Other versions: K. Baeyens & S. Manigart, 2006.
"Follow-on financing of venture capital backed companies: The choice between debt, equity, existing and new investors ,"
Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium
06/362, Ghent University, Faculty of Economics and Business Administration.
[Downloadable!]
Other versions: François Coppens & David Vivet, 2006.
"The single European electricity market: A long road to convergence ,"
Documents series
200605-3, National Bank of Belgium.
[Downloadable!]
Access and
download statistics Did you know? Cannot find something on IDEAS? Encourage the publisher to index it! Instructions .
This page was last updated on 2009-12-13.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .