Title: Making Do With Less: Firm Growth And Financial Performance Under Resource Constraints
Abstract: This paper examines the financial resourcing behaviour of a sample of high growth firms. Firms growing faster than generated internally funds must finance this growth through external means or alternatively adopt bootstrapping measures aimed at increasing efficiency in working capital management. For a sample of manufacturing firms, we find that consistent with the pecking order theory; high growth firms have a preference for internal rather than external finance. More specifically, we find that the short term growth in sales to be largely financed through increased inventory turnover along with a reduction in gross margins. This raises questions about the longer term sustainability of this growth.
Publication Year: 2007
Publication Date: 2007-01-01
Language: en
Type: article
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Cited By Count: 4
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