Financing choices of firms in EU accession countries

Nivorozhkin, Eugene

doi:10.1016/j.ememar.2004.10.002

Cited by 84 publications

(88 citation statements)

References 48 publications

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“…However, these variables alone fail to reliably predict leverage, indicating that one should expect much stronger country effects in less developed countries. These effects are not clear in this highly diverse international sample, nor are they clear in a more geographically proximate environment like Central and Eastern Europe (Nivorozhkin, 2004(Nivorozhkin, , 2005 among countries with common institutional and legal roots. Nevertheless, aside from these differences, many firm-specific factors are internationally relevant.…”

Section: Summary Of Recent Empirical Findingsmentioning

confidence: 92%

“…Nivorozhkin (2002) shows that Hungarian listed firms used excessively low debt compared to Western standards in the early 90s. Later, Nivorozhkin (2005) and Delcoure (2007) both find that, despite the considerable progress CEE countries have made in their financial markets and institutions from 2000 to the present following regime change, debt is still relatively underused. Moreover, following Chen (2004), Delcoure (2007) shows that external debt comes only as a last resort after equity in the hierarchy of financing because managers prefer not to constrain themselves with fixed debt service at the expense of 'costless' equity.…”

Section: Summary Of Recent Empirical Findingsmentioning

confidence: 99%

“…Ang argues that it is difficult to draw a sharp distinction between "real" internal funds and the latent contribution of owners when the roles of owner and manager are not separated. Similarly, Chen (2004), Nivorozhkin (2005) and Delcoure (2007) find that, due to lack of long-term borrowing instruments caused by a combination of a missing corporate bond market and an immature banking system, managers in developing countries prefer external equity to debt because it is not obligatory and because share capital appears to be a long-term and "free" source compared to debt.…”

Section: Qualitative Analyses Of Capital Structurementioning

confidence: 99%

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What managers think of capital structure and how they act: Evidence from Central and Eastern Europe

Hernádi¹,

Ormos

2012

Baltic Journal of Economics

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This paper analyzes the capital structure and the choice of financing alternatives across a broad sample of Central and Eastern European companies. Our investigation is built on two methods: the first concentrates on capital structure decisions through quantitative information applying panel regression for the period 2005-2008 to allow a closer look at the strength of the pecking order and static tradeoff theories; and the second extends the analysis with a qualitative questionnaire on the explicit and latent preferences behind financing policy. The same set of randomly selected 498 firms that fairly represent size classes and countries by the weight of their economic performance are investigated. The CFOs' answers reflect a pecking order driven behavior, with a limited role for the target leverage ratio; this is confirmed by the estimated coefficients of the panel regression.JEL classification: G32 Keywords: Capital structure; Emerging European countries; Static tradeoff theory; Pecking order theory; AcknowledgementWe have received helpful suggestions from Matjaz Crnigoj and Aaro Hazak and useful comments from participants at the 3rd ECEE Conference in Tallinn (2011). We are grateful to the editor and an anonymous reviewer for valuable comments.

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Section: Summary Of Recent Empirical Findingsmentioning

confidence: 92%

Section: Summary Of Recent Empirical Findingsmentioning

confidence: 99%

Section: Qualitative Analyses Of Capital Structurementioning

confidence: 99%

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What managers think of capital structure and how they act: Evidence from Central and Eastern Europe

Hernádi¹,

Ormos

2012

Baltic Journal of Economics

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“…Government subsidies also seem to be less common (or less available). Even though the EU accession countries (mainly former socialist countries) typically still have underdeveloped financial markets (Delcoure 2007; Guiso et al 2004;Mullineux and Murinde 2010;Murinde et al 2004;Nivorozhkin 2005), a considerable number of SMEs in these countries are mixed-financed firms. This highlights the fact that financing from related parties such as family and friends seem to be an important financing alternative in these countries (Aidis 2005).…”

Section: Country-specific Characteristicsmentioning

confidence: 99%

Financing Patterns of European SMEs An Empirical Taxonomy

2015

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PrefaceSmall and medium-sized enterprises (SMEs) are often called the backbone of the European economy, contributing to job creation and economic growth. In 2013, more than 21.5m of SMEs in the European Union made for more than 99% of all non-financial enterprises, employed almost 89m people (67% of total employment), and generated 58% of total added value. However, access to finance is more difficult for SMEs than for larger enterprises, not only during the current financial and economic crisis, but also on a permanent structural basis, due to market imperfections in SME financing (see Kraemer-Eis, Lang and Gvetadze, 2015, for more details).The European Investment Fund (EIF) supports Europe's SMEs by improving their access to finance through a wide range of selected financial intermediaries. To this end, the EIF primarily designs, promotes and implements equity and debt financial instruments which specifically target SMEs. In this role, the EIF fosters EU objectives in support of entrepreneurship, growth, innovation, research and development, and employment.EIF's Research & Market Analysis team has established a research cooperation with the Chair of Management at the University of Trier. This EIF Working Paper is one result of the successful cooperation. A follow-on project, building on the findings of the presented analysis and financially supported by the EIB Institute under the Knowledge Programme, is scheduled to start soon.Even though research in SME financing has strongly increased over the recent years, the financing patterns of SMEs in Europe are still not well analysed. Previous empirical studies have shown that firm-, product-, industry-, and country-specific factors influence the financing of SMEs. However, there are only few studies with a holistic perspective taking into account the interrelationships between different financing instruments and their determinants.The research, presented in this EIF Working Paper, provides an integrative perspective of SME financing patterns by identifying and analysing in detail the use of various financing instruments by SMEs. The findings can support the design and development of SME financing instruments across Europe.We thank the researchers for their important work and the very good cooperation with the EIF. We also thank the participants of a seminar with the researchers, which took place at EIF, as well as the participants of a workshop that took place at the European Central Bank, for fruitful discussions. This EIF Working Paper takes a holistic approach to investigate SME financing patterns in Europe by performing a cluster analysis including 12,726 SMEs in 28 European countries. The results reveal that SME financing in Europe is not homogenous but that different financing patterns exist. The cluster analysis identifies six distinct SME financing types: mixed-financed SMEs, statesubsidised SMEs, debt-financed SMEs, flexible-debt-financed SMEs, trade-financed SMEs and internally-financed SMEs. These SME financing types differ according to the number of fin...

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“…Symbols and are the constant of the model and residual part in the GMM model. The reason for choosing the above mentioned indicators also comes from the performed studies (such as Nivorozhkin [16], Hernardi & Ormos [9], Crnigoj & Mramor [4], Růčková [20], Růčková & Heryán [21]) that considered particularities of the European environment, mainly weaker availability of the market data. It is just the unavailability of the market data that makes it impossible to apply studies performed in the United Stated of America as most of their models mainly use the market value of the company as a factor.…”

Section: Analysis Of the Functional Relation Of The Building Industrymentioning

confidence: 99%

Dependency of return on equity and use of finance sources in building companies in v4 countries

Růčková¹

2015

E+M

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Financing choices of firms in EU accession countries

Cited by 84 publications

References 48 publications

What managers think of capital structure and how they act: Evidence from Central and Eastern Europe

What managers think of capital structure and how they act: Evidence from Central and Eastern Europe

Financing Patterns of European SMEs An Empirical Taxonomy

Dependency of return on equity and use of finance sources in building companies in v4 countries

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