The influence of portfolio diversification of the controlling owners on firm investment is discussed. It is found that firms with high information asymmetry and low-growth rates are more likely to receive external financing than firms with lower information asymmetry. However, the relationship between financial leverage and firm investment is not significant for high-growth firms. These results suggest that the value of firms depends on their overall risk profile and whether they are well-diversified. In addition, this study shows that portfolio diversification has no effect on firm investment if the controlling owners do not own the companies.
Large firms can obtain much larger amounts of funding from government or development banks, but small firms do not receive much more. Developing countries generally do not have the infrastructure to support large-scale firms, and this means that government-funded programs that support small-scale investing are unlikely to make much difference. Even in the most developed economies, where formal job training is more widely available, the amount of investment is relatively small, whereas in developing countries, it is not.
The return on formal job training is a particularly interesting issue. In this article, the authors use a panel of large firms that have detailed information on their workforce and capital stock. They find that the return on formal job training is higher than for physical capital, and that the return on investment is not as large as expected. Although the amount of formal training in these firms is not substantial, it is a worthwhile investment, and may even have higher returns than physical capital in some cases.
The authors use a large sample of firms to examine the return on formal job training. Their data includes detailed data on capital stock, output, and workforce. The results indicate that formal job training can be a good investment in many cases. The observed return is higher than for physical capital, which is important because small firms have limited access to external markets. Moreover, the costs of a formal training program can be much lower than the cost of a conventional loan.
The authors also consider the return on formal job training. They use a panel of large firms and use detailed data on capital stock and workforce. The return on formal job training differs significantly among firms. While this is an important issue, it should not be the only reason to finance small-scale firms. The investment of a private company can be made even in the absence of a public firm’s equity. The latter is often financed through debt.
Despite the political benefits of government funding, firm investment is not systematically financed by small-scale firms. As a result, large firms receive government investments, while smaller firms are unlikely to get governmental funds. Furthermore, in many cases, private investment is the sole source of financing. As a result, there is a lack of financial capital in many underdeveloped countries. In many instances, a smaller business will have to borrow from an alternative source.