Financial constraints in investment: panel data results from Estonia, 1995–1999

Tomasz Mickiewicz, Kate Bishop, Urmas Varblane

Research output: Contribution to journalArticlepeer-review


To investigate investment behaviour the present study applies panel data techniques, in particular the Arellano-Bond (1991) GMM estimator, based on data on Estonian manufacturing firms from the period 1995-1999. We employ the model of optimal capital accumulation in the presence of convex adjustment costs. The main research findings are that domestic companies seem to be financially more constrained than those where foreign investors are present, and also, smaller firms are more constrained than their larger counterparts.
Original languageUndefined/Unknown
Pages (from-to)425-449
Number of pages25
JournalActa Oeconomica
Issue number4
Publication statusPublished - Dec 2004


  • FDI
  • Estonia
  • investment
  • cash flow
  • foreign ownership
  • firm size

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