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An Examination of the Relationship Between Firm Size, Growth and Liquidity in the Neuer Markt

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  • Elston, Julie Ann

Abstract

With the increasing competitive importance of scientific innovations associated with the new economy it has become critical to understand the dynamics of its' firm growth during this early and potentially critical stage of development. This study analyses the relationship between firm size and growth for Neuer Markt firms from its inception in 1997 until 2000 Evidence supports the hypothesis that smaller firms on the Neuer Markt grew faster than larger firms. Further, by using an alternative specification for growth, this study provides evidence that liquidity constraints impact firm growth, even when controlling for firm size and age. Results further indicate that while smaller firms grew faster in the new economy, larger firms grew faster in the old economy, supporting the notion that smaller German firms may be playing a larger role than previously in bringing new technologies to the market place.

Suggested Citation

  • Elston, Julie Ann, 2002. "An Examination of the Relationship Between Firm Size, Growth and Liquidity in the Neuer Markt," Discussion Paper Series 1: Economic Studies 2002,15, Deutsche Bundesbank.
    • Handle: RePEc:zbw:bubdp1:4180
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    Cited by:

    1. Blandina Oliveira & Adelino Fortunato, 2006. "Firm Growth and Liquidity Constraints: A Dynamic Analysis," Small Business Economics, Springer, vol. 27(2), pages 139-156, October.
    2. Blandina Oliveira & Adelino Fortunato, 2008. "The dynamics of the growth of firms: evidence from the services sector," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(3), pages 293-312, July.
    3. repec:kap:iaecre:v:12:y:2006:i:2:p:191-202 is not listed on IDEAS
    4. Georgios Fotopoulos & Ioannis Giotopoulos, 2010. "Gibrat’s law and persistence of growth in Greek manufacturing," Small Business Economics, Springer, vol. 35(2), pages 191-202, September.
    5. Miroslav Mateev & Yanko Anastasov, 2010. "Determinants of small and medium sized fast growing enterprises in central and eastern Europe: a panel data analysis," Financial Theory and Practice, Institute of Public Finance, vol. 34(3), pages 269-295.
    6. Christina E. Bannier & Sabrina Zahn, 2014. "SMEs' Growth Heterogeneity - Evidence from Regional Developments," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 5(2), pages 23-49, March.
    7. Cinzia Genovino & Rosa Maria Caprino, 2018. "Il ruolo della banca nel processo di innovazione del modello di business," ESPERIENZE D'IMPRESA, FrancoAngeli Editore, vol. 2018(2), pages 69-105.
    8. John Sell, 2006. "The Neuer Markt is Dead. Long Live the Neuer Markt!," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(2), pages 191-202, May.
    9. Giorgio Fagiolo & Alessandra Luzzi, 2006. "Do liquidity constraints matter in explaining firm size and growth? Some evidence from the Italian manufacturing industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 15(1), pages 1-39, February.
    10. Juan R. Ferrer & Mar�a Carmen Garc�a-Cortijo & Vicente Pinilla & Juan Sebasti�n Castillo-Valero & Ra�l Serrano, 2022. "Business growth and sustainability in the spanish wine industry," Documentos de Trabajo dt2022-03, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    11. Yuji Honjo & Nobuyuki Harada, 2006. "SME Policy, Financial Structure and Firm Growth: Evidence From Japan," Small Business Economics, Springer, vol. 27(4), pages 289-300, December.
    12. Getachew Ayalu & Aradom Gebrekidan Abbay & Hossein Azadi, 2023. "The role of micro- and small-scale enterprises in enhancing sustainable community livelihood: Tigray, Ethiopia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(8), pages 7561-7584, August.

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