Liquidity Constraints and Investment in Transition Economies: The Case of Bulgaria

Budina, Nina; Garretsen, Harry; Jong, Eelke de

doi:10.1596/1813-9450-2278

Cited by 41 publications

(33 citation statements)

References 6 publications

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“…This problem would be further exacerbated if financial systems are not functioning properly. As Konings et al (2003) and Budina et al (2000) show this appears to be the case of the European Union. Relative to firm growth rates, the mean value is 0.51%.…”

Section: Data and Summary Statisticsmentioning

confidence: 89%

Firm Growth and Liquidity Constraints: A Dynamic Analysis

2006

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Using a large unbalanced panel data set of Portuguese manufacturing firms surviving over the period from 1990 to 2001, the purpose of this paper is to examine whether liquidity constraints faced by business firms affect firm growth. We use a GMM-system to estimate a dynamic panel data model of firm growth tha t incorporates cash flow as a measure of liquidity constraints and persistence of growth. The model is estimated for all size classes, including micro firms. Our findings suggest that smaller and younger firms have higher growth-cash flow sensitivities tha n larger and more mature firms. This is consistent with the suggestion that financial constraints on firm growth may be relatively more severe for small and young firms. Finally, firms that were small and young and strongly liquidity-constrained at the beginning of the sample period exhibited more persistent growth than those that were large and old and weakly liquidity-constrained. These results have significant policy implications.

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Section: Data and Summary Statisticsmentioning

confidence: 89%

Firm Growth and Liquidity Constraints: A Dynamic Analysis

2006

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“…1 This problem would be further exacerbated if financial systems are not functioning properly and studies would indicate that this appears to be the case in CEE , Gros and Suhrchke, 2000, Budina Garretsen and de Jong, 2000and Anderson and Kegels, 1997. However, although Slovenia has made progress in key areas, it lags behind some of the most advanced transition countries when it comes to implementing some specific reforms, namely financial sector development.…”

Section: Introductionmentioning

confidence: 99%

Comparing the Impact of Credit Constraints on the Growth of SMEs in a Transition Country with an Established Market Economy

2006

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractIn this paper we compare the role of internal finance on the growth of firms between a leading transition country, Slovenia and an established market economy, Belgium.We find that firms in Slovenia are more sensitive to internal financing constraints than their Belgian counterparts. This would suggest that although Slovenian firms are no longer recipients of soft budget constraints, capital markets are not yet functioning properly.

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“…In the rest of the paper, we exploit these observed dissimilarities and try to disentangle the correlation between a more formal 10 See Kornai (1979Kornai ( , 1986) for a discussion on soft budget constraints. A series of papers have found that financial constraints were absent or limited in some transition countries and have argued this was due to the persistence of soft budget constraints (see, for example, Budina et al, 2000;Lizal and Svejnar (2002);and Konings et al, 2003). measure of financing constraints and productivity.…”

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confidence: 99%

The Missing Link Between Financial Constraints and Productivity

Badia¹,

Slootmaekers²

2009

IMF Working Papers

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This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.The global financial crisis has reopened the debate on the potential spillover effects from the financial sector to the real economy. This paper adds to that debate by providing new evidence on the link between finance and firm-level productivity, focusing on the case of Estonia. We contribute to the literature in two important respects: (i) we look explicitly at the role of financial constraints; and (ii) we develop a methodology that corrects for the misspecification problems of previous studies. Our results indicate that young and highly indebted firms tend to be more financially constrained. Overall, a large number of firms shows some degree of financial constraints, with firms in the primary sector being the most constrained. More importantly, we find that financial constraints do not lower productivity for most sectors. JEL Classification Numbers: D24, G32, O16, P27

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Liquidity Constraints and Investment in Transition Economies: The Case of Bulgaria

Cited by 41 publications

References 6 publications

Firm Growth and Liquidity Constraints: A Dynamic Analysis

Firm Growth and Liquidity Constraints: A Dynamic Analysis

Comparing the Impact of Credit Constraints on the Growth of SMEs in a Transition Country with an Established Market Economy

The Missing Link Between Financial Constraints and Productivity

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