Financial Constraints in Investment - Foreign Versus Domestic Firms. Panel Data Results From Estonia, 1995-1999

Tomasz Mickiewicz, Kate Bishop and Urmas Varblane

William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: Using data from Estonian manufacturing firms during the period 1995-1999 we apply panel data techniques, in particular the Arellano-Bond (1991) method to investigate the investment behaviour. We employ the model of optimal capital accumulation in the presence of convex adjustment costs. We find that the domestic companies seem to be more financial constrained than those with the presence of foreign investors. Furthermore we find that smaller firms are more constrained than their larger counterparts.

Keywords: Investment; Cash Flow; Foreign Ownership; Firm Size; Estonia (search for similar items in EconPapers)
JEL-codes: C23 F23 G32 P31 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2004-02-01
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (12)

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