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Finance and Investment in Transition : Czech Enterprises, 1993-1994

Author

Listed:
  • Anderson, Ronald

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Kegels, Chantal

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics; Université catholique de Lille, LABORES-URA 362)

Abstract

In this paper we use enterprise data to study the determinants of investment in Czech industry during the period from 1993 through 1994, a period when the transition toward a market economy was rapidly gaining momentum. We investigate accelerator type models modified to include financial variables intended to reflect the possibility of credit rationing. Overall, we find that finance is an important determinant of investment for firms in a transition economy. In particular we find that de novo private firms and firms privatized early invested heavily during 1993 and that they were financially constrained in 1993 and even more so in 1994. In contrast , state owned enterprises including those that were privatized in the course of 1994 invested relatively little in 1993 and were financially constrained neither in 1993 nor in 1994. This evidence is consistent with a pattern that state owned enterprises were placed under financial discipline relatively early in the Czech transition and that their financial access improved with the approach of their privatization.

Suggested Citation

  • Anderson, Ronald & Kegels, Chantal, 1997. "Finance and Investment in Transition : Czech Enterprises, 1993-1994," LIDAM Discussion Papers IRES 1997015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:1997015
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    Citations

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    Cited by:

    1. Budina, Nina & Garretsen, Harry & Jong, Eelke de, 1999. "Liquidity constraints and investment in transition economies : the case of Bulgaria," Research Report 00E05, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    2. Hartarska, Valentina M., 2001. "Investments And Property Rights In Russia: Evidence From Small Firms In Samara," 2001 Annual meeting, August 5-8, Chicago, IL 20739, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Enver BAJÇÝNCA, 2015. "Some features of investing SMEs in Kosovo," Journal of Economics and Political Economy, KSP Journals, vol. 2(2), pages 309-316, June.
    4. Lensink, Robert & Sterken, Elmer, 2000. "Capital Market Imperfections, Uncertainty and Corporate Investment in the Czech Republic," Economic Change and Restructuring, Springer, vol. 33(1-2), pages 53-70.
    5. Natalya Volchkova, 2001. "Does Financial-Industrial Group Membership Affect Fixed Investment: Evidence from Russia," Working Papers w0009, Center for Economic and Financial Research (CEFIR).
    6. Anthony Bende-Nabende & Jim Slater, 2003. "Private capital formation: Short- and long-run crowding-in (out) effects in ASEAN, 1971-99," Economics Bulletin, AccessEcon, vol. 3(28), pages 1-16.
    7. Jozef Konings & Marian Rizov & Hylke Vandenbussche, 2002. "Investment and Credit Constraints in Transition Economies: Micro Evidence from Poland, the Czech Republic, Bulgaria and Romania," LICOS Discussion Papers 11202, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    8. repec:dgr:rugsom:99e51 is not listed on IDEAS
    9. John Hutchinson & Ana Xavier, 2006. "Comparing the Impact of Credit Constraints on the Growth of SMEs in a Transition Country with an Established Market Economy," Small Business Economics, Springer, vol. 27(2), pages 169-179, October.
    10. Hartarska, Valentina M., 2002. "Investment in Young and Established Microenterprises in Russia," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24857, European Association of Agricultural Economists.
    11. repec:dgr:rugsom:00e05 is not listed on IDEAS
    12. repec:ebl:ecbull:v:3:y:2003:i:28:p:1-16 is not listed on IDEAS

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