Comparing the Impact of Credit Constraints on the Growth of SMEs in a Transition Country with an Established Market Economy
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. Furthermore, we find that de novo firms and firms with long term debt are most constrained and that micro and SMES can face great difficulties in accessing external sources of finance. Foreign firms, however, are able to raise external finance and consequently their growth is less reliant on the availability of internal finance. Our findings appear to indicate that although Slovenian firms are no longer recipients of soft budget constraints, the financial environment is not yet fully functional. Copyright Springer 2006
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Bibliographic InfoArticle provided by Springer in its journal Small Business Economics.
Volume (Year): 27 (2006)
Issue (Month): 2 (October)
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Web page: http://www.springerlink.com/link.asp?id=100338
financial constraints; manufacturing; transition economics; G33; P2; L6;
Other versions of this item:
- John Hutchinson & Ana Xavier, 2004. "Comparing the Impact of Credit Constraints on the Growth of SMEs in a Transition Country with an Established Market Economy," LICOS Discussion Papers 15004, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- P2 - Economic Systems - - Socialist Systems and Transition Economies
- L6 - Industrial Organization - - Industry Studies: Manufacturing
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