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Passivity of Creditors among Non-Financial Enterprises in Bulgaria

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  • Galya Taseva

Abstract

The aim of the article is to study creditor passivity among non-financial enterprises in Bulgaria. The analysis is based on data from a national representative empirical sociological survey among 1000 non-financial enterprises of different size and main activity. The results of the survey reveal that a significant part of the companies (little more than one-tenth of respondents) do not have a precisely defined approach to reducing the risk of overdue receivables. The profile of companies showing creditor passivity is outlined. On the whole, it can be summarized that the share of firms lacking a certain approach to reducing the risk of overdue receivables is higher for enterprises with lower turnover and value-added, with fewer employees, operating in sectors with lower entry barriers, firms that have failed to expand their markets and their production capacity in recent years and are characterized by weak innovation activity.There are statistically significant links between the lack of a certain approach to mitigating the risk of overdue receivables and various indicators of the relative market power of firms.The study also identifies dependencies between the passivity of firms as creditors and their innovation activity, the specifics of the corporate culture, in particular, the management of the motivation of the employees, the maintenance of the image of the company in the public space, the concern for building a long-term relationship with the trade partners. These dependencies also testify to the importance of the quality of management and, in particular, to the role of having a comprehensive vision of the company's development for effective credit risk management.

Suggested Citation

  • Galya Taseva, 2019. "Passivity of Creditors among Non-Financial Enterprises in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 128-159.
    • Handle: RePEc:bas:econst:y:2019:i:6:p:128-159
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    Cited by:

    1. Sarah Goldman & Virginia Zhelyazkova, 2023. "Drivers of Shadow Banking System: A Panel Empirical Approach for Developed Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 8, pages 95-122.
    2. Dimiter Nenkov & Yanko Hristozov, 2023. "DCF Valuation: the Interrelation between the Dynamics of Operating Revenue and Gross Investments," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 114-138.

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    More about this item

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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