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Small Business Economics

, Volume 9, Issue 2, pp 97–110 | Cite as

Financing the German Mittelstand

  • David B. Audretsch
  • Julie A. Elston
Article

Abstract

This paper describes how the German Mittelstand, or small- and medium-sized enterprises, are financed in Germany. The role of the German Mittelstand, both in a static and in a dynamic framework, is described and contrasted with that of the same size group in other leading industrialised countries. We find that in general, the Mittelstand has played a mmore important role in Germany than in other industrialised nations, such as the United States or the United Kingdom. The traditional success of the German Mittelstand is partly attributable to a system of finance that is richly layered by complementary institutions designed to meet the financial needs of both large and smaller enterprises. However, we find evidence that even under the German system of finance liquidity constraints exist and are greater for smaller firms. The German system of finance moreover seems particularly deficient in the channeling of funds to new firm startups in the newer industries.

Keywords

United States Size Group Industrialise Country Small Firm Industrial Organization 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Kluwer Academic Publishers 1997

Authors and Affiliations

  • David B. Audretsch
    • 1
    • 2
  • Julie A. Elston
    • 3
    • 4
  1. 1.School of Policy StudiesGeorgia State UniversityUSA
  2. 2.Belin Institute for Economic StudiesBerlinGermany
  3. 3.California Institute of TechnologyCaliforniaUnited States of America
  4. 4.Berlin Institute for Economic StudiesBerlinGermany

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