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http://hdl.handle.net/1942/8247
Title: | Estimating individual financial constraints | Authors: | D'ESPALLIER, Bert PEETERS, Ludo VANDEMAELE, Sigrid |
Issue Date: | 2006 | Source: | EFMA Annual Meeting, Madrid. | Abstract: | We estimate firm-specific cash flow sensitivities of investment for a panel of manufacturing SMEs, using the generalized maximum entropy-estimator (GME). Since this estimator easily allows for slope heterogeneity, we no longer have to rely on ex-ante sample splitting, which has been common practice in this literature. The results show a wide variation in individual sensitivities in every year, demonstrating the relevance of estimating firmspecific coefficients rather than an aggregate coefficient for assumed sub-samples. On the basis of the distribution of estimated sensitivities, differences in financial profile and financing behaviour between high sensitivity firms and the remainder of the sample were analysed . The results provide evidence for the existence of financial constraints for the high sensitivity sub-sample based on financial profile, but not on the actual use of various funding sources. | Notes: | 26 pag | Keywords: | corporate finance, small business finance, financial constraints, entropy econometrics, slope heterogeneity | Document URI: | http://hdl.handle.net/1942/8247 | Category: | C2 | Type: | Conference Material |
Appears in Collections: | Research publications |
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