We estimate firms' cash flow sensitivity of cash to empirically test how the financial system's structure and activity level influence their financial constraints. For this purpose we merge Almeida, Campello and Weisbach (2004), a pathbreaking new design for evaluating a firm's financial...

Trade credits are an important financing tool for internationally active firms. This is surprising, as trade credits are generally more expensive than bank credits and thus a costly substitute for bank financing. In this paper, we investigate the relation between trade credits and bank credits...

Internationally active firms rely intensively on trade credits even though they are considered particularly expensive. This phenomenon has been little explored so far. Our theoretical analysis shows that trade credits can alleviate financial constraints arising from asymmetric information...

Using a newly constructed panel dataset of German enterprises, I estimate R&D and capital investment equations for the time period from 1990 to 1994. Simple accelerator specifications indicate considerable sensitivity of R&D and investment to cash flow for relatively small firms. Much of this...

Using newly available data at the firm level, this study provides convincing evidence of the importance of financial constraints in explaining the timing of innovations in the German services sector. Based on a dynamic model of firms' optimal R&D behavior under financial constraints, we estimate...

Analyzing a comprehensive database of limited liability manufacturing firms this paper investigates the relation between a firm's financial situation and its conditional expected growth rate. Specifically, using quantile regressions, we obtain a quantitative characterization of this relation for...

This work explores a number of properties investigated in the empirical literature on firm size and growth dynamics: (i) the distribution and the autoregressive structure of firm size; (ii) the existence of size-growth scaling relationships; (iii) the distribution and the autoregressive structure...

In this work we investigate two crucial dimensions of firms' structure and dynamics, that is profitability and productivity performance. The empirical distributions and the associated persistence over time are explored through a set of parametric and non parametric exercises performed on an...

We study the relationships between firm financial structure and growth for a large sample of Italian firms (1998-2003). We expand upon existing analyses testing whether liquidity constraints affect firm performance by considering among growth determinants also firm debt structure. Panel...