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Please use this identifier to cite or link to this item: http://hdl.handle.net/1942/8247

Title: Estimating individual financial constraints
Authors: D'ESPALLIER, Bert
Issue Date: 2006
Citation: EFMA Annual Meeting, Madrid.
Abstract: We estimate firm-specific cash flow sensitivities of investment for a panel of manufacturing SMEs, using the generalized maximum entropy-estimator (GME). Since this estimator easily allows for slope heterogeneity, we no longer have to rely on ex-ante sample splitting, which has been common practice in this literature. The results show a wide variation in individual sensitivities in every year, demonstrating the relevance of estimating firmspecific coefficients rather than an aggregate coefficient for assumed sub-samples. On the basis of the distribution of estimated sensitivities, differences in financial profile and financing behaviour between high sensitivity firms and the remainder of the sample were analysed . The results provide evidence for the existence of financial constraints for the high sensitivity sub-sample based on financial profile, but not on the actual use of various funding sources.
Notes: 26 pag
URI: http://hdl.handle.net/1942/8247
Category: C2
Type: Conference Material
Appears in Collections: Research publications

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