Service industries, growth dynamics and financial constraints

Cristiana Donati

The Service Industries Journal, 2017, vol. 37, issue 3-4, 190-205

Abstract: This work represents a first attempt to study the effects of financial constraints on firm growth within the business services as it can be argued that firms are different not only in terms of size but also in the way they operate in a specific industry. Thus, firms can be either characterized by the use of intensive professional knowledge or, alternatively, by the use of a workforce with no specific professional skills. For the business services included, the results reveal the relative importance of internal sources of financing with respect to the external ones. The liquidity constraints mainly affect the growth of industries requiring qualified labor pool, such as computer programming and information service activities, as well as the professional and scientific ones. In these sectors, foremost operate small firms with a superior innovation capacity; therefore, they are considered risky and face difficulties in raising debt capital on favorable terms.

Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:taf:servic:v:37:y:2017:i:3-4:p:190-205

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DOI: 10.1080/02642069.2017.1304927

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The Service Industries Journal is currently edited by Eileen Bridges, Professor Domingo Ribeiro, Ronald Goldsmith, Barry Howcroft and Youjae Yi

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