Investment activities of small and medium sized enterprises

Using balance sheet data from 2005 to 2014, we analyse the investment be-haviour of German small and medium-sized enterprises (SMEs). The results show that SMEs  and specifically micro-enterprises   have been investing rather less than large enterprises especially after the financial crisis in 2009/2010. At the same time, SMEs also show a good economic performance according to established balance sheet ratios. We therefore conclude that SMEs tend to invest more selective and efficient in order to strengthen their own equity capital base and to reduce dependencies on external investors. Hence, possibilities of economic policy to foster investments are limited in the short run for what reason long term and growth-oriented economic policies should be preferred.

Dienes, C.; Pahnke, A.; Wolter, H.J. (2018): Das Investitionsverhalten kleiner und mittlerer Unternehmen, IfM Bonn: IfM-Materialien Nr. 268, Bonn

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