The Employment-Financing Nexus: Evidence from a Panel of West German Firms

The Employment-Financing Nexus: Evidence from a Panel of West German Firms The objective of the paper is to investigate the linkage between financial factors and employment decisions of West German firms. The underlying model is based upon rational expectations and convex adjustment costs. The time series, cross-section estimates for the period 1989–1994 are obtained using information on individual firms contained in business surveys. We find that financial constraints can indeed restrain the level of employment in small firms. On the contrary, there is no evidence that this result applies to larger firms as well. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

The Employment-Financing Nexus: Evidence from a Panel of West German Firms

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 1998 by Kluwer Academic Publishers
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1023/A:1007959512867
Publisher site
See Article on Publisher Site

Abstract

The objective of the paper is to investigate the linkage between financial factors and employment decisions of West German firms. The underlying model is based upon rational expectations and convex adjustment costs. The time series, cross-section estimates for the period 1989–1994 are obtained using information on individual firms contained in business surveys. We find that financial constraints can indeed restrain the level of employment in small firms. On the contrary, there is no evidence that this result applies to larger firms as well.

Journal

Small Business EconomicsSpringer Journals

Published: Oct 6, 2004

References

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