Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26772
Authors: 
Engel, Dirk
Middendorf, Torge
Year of Publication: 
2007
Series/Report no.: 
Ruhr economic papers 7
Abstract: 
Previous studies argued that low investment-cash flow sensitivities of German firms may be caused by dominance of public banking.The paper addresses this topic and applies a unique accounting dataset of German firms. Results from a dynamic panel data approach show that the dependence of investment spending on internal funds does not significantly differ between firms attached to savings banks, cooperative banks or commercial banks. Thus, the importance of the public banking sector in Germany may not explain the rather low dependence of firms on internal funds and public ownership of borrowers seems not essential to reduce financing constraints.
Subjects: 
Investment
Relationship Banking
Panel Data
GMM
JEL: 
G32
D92
L21
C23
Document Type: 
Working Paper

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