Equity gap? - Which equity gap? On the financing structure of Germany's Mittelstand
This paper examines the financing structure of small and medium-sized enterprises (SMEs) in Germany and questions whether an equity gap - or, more generally, a financing gap -exists. Reviewing the literature and available data sources, we find that financing constraints seem to affect, if at all, only a very small subgroup among highly growth-oriented firms. We do not detect any structural problems in average SME's capital structure. Rather, German Mittelstand firms appear to be non-growth oriented and content with their financing decisions. While the relationship-based German banking system helps to minimize the risk of credit rationing, trade credit offers an additional, stable form of liquidity insurance. Highly innovative firms with strong growth potential, on the other hand, do seize the opportunity to tap unconventional means of financing (e.g. mezzanine capital) and appear very successful in doing so.
|Date of creation:||2008|
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- Ansgar Belke & Thorsten Polleit, 2005. "(How) Do Stock Market Returns React to Monetary Policy? - An ARDL Cointegration Analysis for Germany," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 253/2005, Department of Economics, University of Hohenheim, Germany.
- Ansgar Belke & Thorsten Polleit, 2007.
"How the ECB and the US Fed set interest rates,"
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- Ansgar Belke & Thorsten Polleit, 2006. "How the ECB and the US Fed Set Interest Rates," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 269/2006, Department of Economics, University of Hohenheim, Germany.
- Hirsch, Christian & Bannier, Christina E., 2007. "The economics of rating watchlists: Evidence from rating changes," CFS Working Paper Series 2008/02, Center for Financial Studies (CFS).
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- Wollersheim, Jutta & Barthel, Erich, 2008. "Kulturunterschiede bei Mergers & Acquisitions: Entwicklung eines Konzeptes zur Durchführung einer Cultural Due Diligence," Frankfurt School - Working Paper Series 94, Frankfurt School of Finance and Management. Full references (including those not matched with items on IDEAS)
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