Investment-cash flow sensitivity in small and medium sized enterprises at expansion stage

• Autores: José Martí Pellón, María Alejandra Ferrer
• Localización: Revista Internacional de la Pequeña y Mediana Empresa, ISSN-e 1989-1725, Vol. 1, Nº. 4, 2012, págs. 68-89
• Idioma: español
• Títulos paralelos:
  • Sensibilidad de la inversión al flujo de caja en pequeñas y medianas empresas en fase de expansión
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• Resumen

  • Most of the controversy about the investment-cash flow sensitivity as a measure of financial constraints concentrates on listed firms. We assume that unlisted growing Small and Medium-Sized Enterprises (SMEs) were subject to financial constraints before a Venture Capital (VC) investment. We analyse the investment-cash flow sensitivity in unlisted Spanish SMEs with and without VC involvement. We find a positive relationship between investment and cash flow in all unlisted firms, which is larger in the subsample of VC-backed firms. Our findings provide an additional justification for the role of VC as a source to fill the financing gap and support the investment-cash flow sensitivity as a measure of the presence of financial constraints.