Change search
ReferencesLink to record
Permanent link

Direct link
The Impact of Firm Collateral on Knowledge IntensiveConsulting Firms
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Economics. KTH, School of Industrial Engineering and Management (ITM), Centres, Centre of Excellence for Science and Innovation Studies, CESIS.ORCID iD: 0000-0002-9311-3914
2008 (English)Report (Other academic)
Abstract [en]

This paper explores how sales and employment for knowledge intensive consulting firms arecorrelated. I apply theory on cash flow-investment sensitivities, mostly applied tomanufacturing firms, to a less capital intensive part of the economy. Therefore theknowledge intensive consulting sector is investigated but instead of analyzing the investmentin plant and machinery this analysis regards the investment in skilled employees. Theargument of Kaplan & Zingales (1997) regarding low cash flow-investment sensitivity beinga sign of financial distress is applied. The main result is that firms less likely to be financiallyconstrained display 60 percent higher sales-employment sensitivities than firms more likelyto be financially constrained. The results are estimated from a sample comprising 23,500Swedish knowledge intensive consulting firms.

Place, publisher, year, edition, pages
CESIS, KTH Royal Institute of Technology , 2008. , 22 p.
CESIS Working Paper Series in Economics and Institutions of Innovation, 135
Keyword [en]
Incomplete markets, asymmetric information, knowledge intensive business services, economic development
National Category
URN: urn:nbn:se:kth:diva-72370OAI: diva2:487535
QC 20120208Available from: 2012-02-08 Created: 2012-01-31 Last updated: 2012-02-08Bibliographically approved

Open Access in DiVA

CESISWP135(177 kB)199 downloads
File information
File name FULLTEXT01.pdfFile size 177 kBChecksum SHA-512
Type fulltextMimetype application/pdf

Search in DiVA

By author/editor
Martinsson, Gustav
By organisation
EconomicsCentre of Excellence for Science and Innovation Studies, CESIS

Search outside of DiVA

GoogleGoogle Scholar
Total: 199 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 45 hits
ReferencesLink to record
Permanent link

Direct link