The finance-investment link in a transition economy: Evidence for Poland from panel data
AbstractReal investment in Poland declined from 1990 to 1993, and only slowly recovered, while real credit decreased for a number of years, too. Has declining credit adversely affected investment? Controlling for industry and time fixed effect, and using dynamic panel data techniques, I estimate an investment model, which includes external and internal finance as investment determinants. The results suggest that internal and external finance are positively related to investment. Thus, industries seems to operate under hard budget constraints. Also, internal finance is more important than external finance in determining investment, thus indicating that credit rationing occurs. Finally, the effects of external finance are slightly larger among durable goods producing industries than in non-durable goods producing industries. --
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Bibliographic InfoPaper provided by ZEI - Center for European Integration Studies, University of Bonn in its series ZEI Working Papers with number B 04-1999.
Date of creation: 1999
Date of revision:
Other versions of this item:
- Christian Weller, 2001. "The Finance-Investment Link in a Transition Economy: Evidence For Poland From Panel Data," Comparative Economic Studies, Palgrave Macmillan, vol. 43(1), pages 31-52, April.
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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- Christian Weller, 2000.
"Financial Liberalization, Multinational Banks and Credit Supply: The case of Poland,"
International Review of Applied Economics,
Taylor and Francis Journals, vol. 14(2), pages 193-211.
- Weller, Christian E., 1999. "Financial liberalization, multinational banks and credit supply: The case of Poland," ZEI Working Papers B 10-1999, ZEI - Center for European Integration Studies, University of Bonn.
- Slomka, Agnieszka, 2005. "Have banks filled the gap? Credit as a mechanism of corporate governance in a transition country: example of Poland," MPRA Paper 642, University Library of Munich, Germany.
- Weller, Christian E. & von Hagen, Jürgen, 1999. "Financial fragility or what went right and what could go wrong in central European banking?," ZEI Working Papers B 13-1999, ZEI - Center for European Integration Studies, University of Bonn.
- Tomasz Mickiewicz & Kate Bishop & Urmas Varblane, 2004. "Financial Constraints in Investment - Foreign Versus Domestic Firms. Panel Data Results From Estonia, 1995-1999," William Davidson Institute Working Papers Series 2004-648, William Davidson Institute at the University of Michigan.
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