Investments, financial constraints in non-quoted Swedish Firms

Linda Dastory (), Johan Eklund () and Emil Numminen ()
Additional contact information
Linda Dastory: Royal Institute of Technology, Postal: Lindstedtsvägen 30, SE-114 28 , Stockholm, Sweden
Emil Numminen: Department of Industrial Economics, Blekinge Inst of Technology, Postal: Department of Industrial Economics, Blekinge Inst of Technology, 371 79 Karlskrona, Sweden

No 2017/02, Working Papers from Blekinge Institute of Technology, Department of Industrial Economics

Abstract: Using panel data from 10 573 non-quoted Swedish SMEs over the period 2006-2014, we examine how dependent investments made by Swedish SMEs are of internally generated cash-flows. To control for investment opportunities, we use an accelerator model. Applying a static accelerator model our result shows that, investment levels are in fact affected by the availability of internal funding. It takes between 2-2.5 years for the capital stock to adjust to shocks in demand. As the speed of the adjustment rate increases firms’ investment levels become more dependent on internal funding, indicating high adjustment costs. Finally, as firms become larger their investment level becomes less dependent on internal funding, indicating that it may be easier for larger firms to attract external funding.

Keywords: Non-quoted SMEs; Cash flow; Investments; Financial Constraints; Accelerator model. (search for similar items in EconPapers)
JEL-codes: D92 E22 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2017-12-12
New Economics Papers: this item is included in nep-cfn, nep-eur, nep-mac and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www2.bth.se/mam/forskning.nsf/attachments/ ... stment20171212WP.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www2.bth.se:443 (No such host is known. )

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:bthcsi:2017-002

Access Statistics for this paper

More papers in Working Papers from Blekinge Institute of Technology, Department of Industrial Economics Department of Industrial Economics, Blekinge Inst of Technology, 371 79 Karlskrona, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Martin Andersson ().