Investment Sensitivity to Inter-enterprises Payment Deadlines

This paper investigates the determinants of firms investment financing constraints. Using an endogenous switching regression model on French Provence- Alpes Côte d'Azur region firms data collected between 2005-2014, we provide a novel evidence of the role of inter-enterprises payment deadlines which are days of sales outstanding and suppliers payment terms, as factors determining firms investment financing constraints. We also show that there is a non-negligible number of firms switching each year either from constrained regime to unconstrained regime or unconstrained regime to constrained one. By developing a model, we highlight the factors determining firms regime change