Budget Constraints and Profitability: Evidence from a Transition Economy
AbstractA conceptual framework for analyzing the credit rationing and the link between credit access and profitability is developed. The empirical analysis using data from manufacturing firms in Bulgaria, provides direct estimates of credit rationing and its impact on profitability in transition economies. The results from the switching regression suggest that the presence of credit market constraints does impinge on profitability of credit rationed firms and support the credit crunch hypothesis for periods following the financial market collapse as a result of previous soft budget constraints.
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Bibliographic InfoPaper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 11602.
Length: 24 pages
Date of creation: 2002
Date of revision:
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credit rationing; profitability; economies in transition; Bulgaria;
Find related papers by JEL classification:
- G3 - Financial Economics - - Corporate Finance and Governance
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- P2 - Economic Systems - - Socialist Systems and Transition Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-03 (All new papers)
- NEP-EFF-2003-11-23 (Efficiency & Productivity)
- NEP-FIN-2003-11-03 (Finance)
- NEP-MFD-2003-11-03 (Microfinance)
- NEP-TRA-2003-11-03 (Transition Economics)
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- Oliver Gloede & Ornsiri Rungruxsirivorn, 2013.
"Local Financial Development and Household Welfare: Microevidence from Thai Households,"
Emerging Markets Finance and Trade,
M.E. Sharpe, Inc., vol. 49(4), pages 22-45, July.
- Gloede, Oliver & Rungruxsirivorn, Ornsiri, 2012. "Local Financial Development and Household Welfare: Microevidence from Thai Households," Proceedings of the German Development Economics Conference, Hannover 2010 38 [rev.], Verein für Socialpolitik, Research Committee Development Economics.
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