Information asymmetry and investment in the manufacture of food products and beverages and in the manufacture of motor vehicles, trailers and semi-trailers
Information asymmetry and investment in the manufacture of food products and beverages and in the manufacture of motor vehicles, trailers and semi-trailers

Author(s): Dominika Zenka-Podlaszewska
Subject(s): Economy
Published by: Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu
Keywords: asymmetric information;manufacturing;cointegration;impulse response analysis;investment;interest rate;financial constraints;
Summary/Abstract: The aim of this Chapter is to verify whether or not larger firms in the Polish manufacturing sector are less likely to be affected by asymmetric information than smaller ones. The first Section is devoted to the description of the asymmetric information mechanism as well as formulating hypothesis. Financial constrains exist if investment is more responsive to changes to the level of liquidity than interest rates. If, however, it transpires that the fragmented division is more dependent upon the level of cash flow (decoupled from market interest rate levels) than the consolidated division, this would suggest that smaller firms are more financially constrained than larger ones. Section two presents cointegration and impulse response analysis, namely: analysis of food product and beverage manufacturing; motor vehicle, trailer and semi-trailer manufacturing and a comparison of outcomes.

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