We investigate whether technological differences of UK manufacturing industries influence the response of firms' capital-labour (K/L) ratio to changes in financial indicators under financial frictions. The results reveal that technological factors along with internal funds significantly affect...

Focusing on a panel of unlisted firms from transition economies, we observe that only firms facing low irreversibility exhibit high and significant investment-cash flow sensitivities. Our findings provide a new explanation for why some financially constrained firms may exhibit low sensitivities.