German business groups offer limited investment protection for medium to large firms.
The study looked at German companies to see if being part of business groups affects how much they invest based on their cash flow. They found that small firms in these groups only slightly reduced their investment sensitivity to cash flow, while medium and large firms didn't change much. The researchers suggest that the benefits of being in business groups for these companies are more about enforcing contracts and coordinating activities, rather than getting money from capital markets.