FINANCING EFFECT ON FIRM GROWTH: EVIDENCE FROM EUROPEAN LISTED FIRMS
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In times of economic uncertainty, the estimation of firm growth is becoming more important to market participants. This paper examines empirically the effect on firm growth because of the different finance with regards to European listed firms. A set of European panel data from 12 countries during 2005-2020 is used in this study. The final data sample consists of 1099 companies and around 17584 firm-year observations depending on which one of the two growth measures are investigated: assets growth and sales growth. Additionally, the regression model includes free cash flow, leverage, and trade credit as independent variables and employees as a control variables. Findings reveal a free cash flow and leverage have a significant negative effect on firm growth. But in terms of trade credit, it has a statistically significant positive impact on firm growth.