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Equity And Rate Of Return: Are Small Manufacturing Firms Handicapped By Their Own Success?


  • Bernard Paranque

    (Banque de France)


From a french pannel of manufacturing firm, this article aims to show that the terms of the debate on the capitalization of small manufacturing firms ought to be clarified. These firms are often said to be undercapitalized, because in relative terms their capital spending is often similar, or even greater, than that of their larger competitors. This means that their earnings are depleted by the higher depreciation charges for maintaining their fixed assets. Undercapitalization is also due to the fact that firms in this category have poor access to capital markets.

Suggested Citation

  • Bernard Paranque, 1995. "Equity And Rate Of Return: Are Small Manufacturing Firms Handicapped By Their Own Success?," Finance 9508002, EconWPA, revised 29 Oct 2000.
  • Handle: RePEc:wpa:wuwpfi:9508002
    Note: 8 pages, pdf

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    References listed on IDEAS

    1. Calomiris, Charles W & Hubbard, R Glenn, 1990. "Firm Heterogeneity, Internal Finance, and 'Credit Rationing.'," Economic Journal, Royal Economic Society, vol. 100(399), pages 90-104, March.
    2. Gilbert Cette & Daniel Szpiro, 1989. "Les entreprises françaises sont-elles bien dimensionnées ?," Économie et Statistique, Programme National Persée, vol. 217(1), pages 83-94.
    3. Marc-Antoine Kleinpeter, 1991. "L'illusion patrimoniale après l'illusion monétaire," Revue d'Économie Financière, Programme National Persée, vol. 18(3), pages 91-111.
    4. Daniel Szpiro, 1991. "Endettement, rentabilité, débouchés et investissement : une analyse sur données individuelles d'enquêtes et de comptes d'entreprises," Économie et Prévision, Programme National Persée, pages 145-162.
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    More about this item


    equity; rate of retrurn; accumulation; sme's;

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • G - Financial Economics

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