Citation

Discussion Paper Details

Please find the details for DP1072 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Does Firm Size Matter? Evidence on the Impacts of Liquidity Constraints on Firm Investment Behaviour in Germany

Author(s): David B Audretsch and Julie Ann Elston

Publication Date: November 1994

Keyword(s): Germany, Investment and Liquidity Constraints

Programme Area(s): Industrial Organization

Abstract: This paper examines the link between liquidity constraints and investment behaviour on the one hand, and firm size on the other for a large sample of German firms over the time period 1968-85. The results indicate that smaller firms tend to have investment functions which are more sensitive to liquidity constraints than do the larger enterprises. These results support the hypothesis that smaller firms tend to be disadvantaged relative to their larger counterparts in terms of access to finance. Such liquidity constraints are found to exist in Germany only since the mid-1970s, however. Apparently the German model of finance was able to avoid imposing financial constraints on even smaller enterprises prior to the mid-1970s. Since then, however, the evidence suggests that it has not succeeded in avoiding such liquidity constraints, particularly with respect to the finance of smaller enterprises.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1072

Bibliographic Reference

Audretsch, D and Elston, J. 1994. 'Does Firm Size Matter? Evidence on the Impacts of Liquidity Constraints on Firm Investment Behaviour in Germany'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1072