This thesis investigates the relation of liquidity constraints and investment behavior for German firms listed in the Prime Standard from 2001 to 2008. Investments of financially constrained firms are found to be more sensitive to internal funds than those of less constrained firms, once I account for additional ?investments? in Working Capital. The phenomenon of cash hoarding that enables a smoothing of investments cannot be affirmed. Incorporating the influence banks exert on non-financial companies suggests that a close bank relationship indeed alleviates the dependency of financially constrained companies on internal financing. I further provide evidence that the ownership structure of companies as an aspect of Corporate Governance equally impacts the investment-cash flow sensitivity. Family owned businesses significantly mitigate the positive correlation, whereas external blockholder augment it.     «

This thesis investigates the relation of liquidity constraints and investment behavior for German firms listed in the Prime Standard from 2001 to 2008. Investments of financially constrained firms are found to be more sensitive to internal funds than those of less constrained firms, once I account for additional ?investments? in Working Capital. The phenomenon of cash hoarding that enables a smoothing of investments cannot be affirmed. Incorporating the influence banks exert on non-financial com...     »