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Table 1 Literature Review

From: Effect of financial constraints on the growth of family and nonfamily firms in Turkey

Author(s)

Year

Country

Time Span

Sample

Findings

Carpenter & Petersen

2002

USA

1980–1992

1637 small manufacturing firms

Firms generally retain all of their income and they use little or no external finance. They are constrained by internal finance

Wagenvoort

2003

EU Members

1996–2000

194,208 manufacturing and construction firms (SMEs)

The growth of the smaller firms rely on internal cash flows more than the larger firms

Fagiolo & Luzzi

2006

Italy

1995–2000

14,277 manufacturing firms (covering 90% of all Italian firms with sales larger than 1 M Euros)

Small firms show greater growth performance but they are also affected by financial constraints.

Hutchinson & Xavier

2006

Slovenia and Belgium

1993–2000 for Belgium and 1994–2002 for Slovenia

7139 Belgian and 4992 Slovenian manufacturing firms (Micro, SME, and large firms)

Slovenian firms are affected more from the financing constraints than the Belgian firms. Foreign firms can find external finance. De novo firms and firms with long term debt are the most reliant on the availability of internal finance for growth.

Oliveira & Fortunato

2006

Portugal

1990–2001

7653 surviving manufacturing firms (with all size classes, including micro firms)

The growth-cash flow sensitivity is greater for the smaller and younger firms.

Serrasqueiro et al.

2010

Portugal

1999–2006

2278 unlisted Portuguese SMEs

Cash flow dependency of growth takes higher importance for the smaller firms.

Guariglia et al.

2011

China

2000–2007

79,841 unlisted manufacturing and mining firms

State-owned firms are not constrained by their internal cash flow. However, the private firms especially those operating in coastal regions, with negligible foreign ownership, have problems accessing external finance.

Guariglia & Mizen

2012

China, Hong Kong, Indonesia, Korea,

Malaysia, the Philippines, Singapore, and Thailand.

2001–2009

19,918 firm-year observations

Internal cash flows positively affect firm growth (measured by the growth of the assets). The result means the growth of the firms relies on internal cash flows.

Yazdanfar & Turner

2013

Sweden

2007–2008

10,383 micro firms

The growth of micro firms is positively affected by internal cash flows. This means they are reliant on their own cash flows to grow.

Coluzzi et al.

2015

France, Germany, Italy, Portugal, and Spain

1993–2005

482 firms (with different firm types)

The growth of the firms is positively linked to internal cash flows.

Donati

2016

Italy

2011–2008

76,464 surviving SMEs firms

The effect of cash flow is positive and significant for all sectors. But firms belonging to low and medium-low technologies sectors are more liquidity constrained.

Quader

2017

UK

1981–2009

1122 listed firms on the London Stock Exchange

The findings are parallel with financial constraints stemming from market imperfections and refer a larger firm growth- cash flow dependency for firm years facing the most binding financial constraints

Miroshnychenko et al.

2019

Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, and Switzerland

2002–2011

832 non-financial and non-regulated European publicly-traded firms

The relationship between firm growth and cash flows is positive and significant which addresses problems about accessing external finance.