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Comovement of Sales, Retention Practice and Financing Constraints in Dutch Manufacturing
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Abstract
This paper assesses the significance of financing constraints in investment decisions for a balanced panel of 206 of the largest Dutch manufacturing firms over the period 1983-1996, employing split sample analysis of reduced form investment equations. Our empirical evidence demonstrates that financing constraints matter in Dutch manufacturing and are associated with high retention practice and strong firm-industry sales comovement.mathematical economics;