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Identification of Factors of Formation of the Cost of Financial Resources of Economic Subjects

  • Zakorko Marina V.

    ()

    (Donetsk National University)

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    The article generalises and systemises factors of formation of the cost of financial resources of economic subjects that aggregate four blocks: factors, caused by the structure of assets, effectiveness and prospects of investment activity of an economic subject; factors, determined by the structure of financing of activity of an economic subject; factors, caused by the structure of ownership; and external factors that reflect influence of macro-economic environment. The article underlines fundamental rule, according to which the higher the inefficiency and imperfection (friction property) of the financial market, the bigger the influence of specific internal factors of activity of economic subjects upon the cost of their financial resources. The article makes a conclusion on the basis of the analysis of the degree of financial development of Ukraine that there are all prerequisites for formation of a significant discrepancy between the cost of external and internal financing, which manifests itself most vividly in the period of a crisis and recession. The article assesses indicators of internal determinants of the cost of financing (size of a company, structure of assets and prospects of growth) of economic subjects in Ukraine, which could be compared with indicators of the countries with developing markets. The article generalises cost factors from the view of specific features of the formed structure of ownership of economic subjects in Ukraine.

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    File URL: http://www.business-inform.net/pdf/2013/5_0/278_287.pdf
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    Article provided by RESEARCH CENTRE FOR INDUSTRIAL DEVELOPMENT PROBLEMS of NAS (KHARKIV, UKRAINE), Kharkiv National University of Economics in its journal Business Inform.

    Volume (Year): (2013)
    Issue (Month): 5 ()
    Pages: 278_287

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    Handle: RePEc:idp:bizinf:y:2013:i:5:p:278_287
    Contact details of provider: Web page: http://www.business-inform.net

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    1. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-86, June.
    2. Giorgio Fagiolo & Alessandra Luzzi, 2006. "Do liquidity constraints matter in explaining firm size and growth? Some evidence from the Italian manufacturing industry," Industrial and Corporate Change, Oxford University Press, vol. 15(1), pages 1-39, February.
    3. Blandina Oliveira & Adelino Fortunato, 2005. "Firm Growth and Liquidity Constraints: A Dynamic Analysis," GEMF Working Papers 2005-07, GEMF - Faculdade de Economia, Universidade de Coimbra.
    4. 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.
    5. Christopher A. Hennessy & Toni M. Whited, 2007. "How Costly Is External Financing? Evidence from a Structural Estimation," Journal of Finance, American Finance Association, vol. 62(4), pages 1705-1745, 08.
    6. Heitor Almeida & Murillo Campello & Michael S. Weisbach, 2004. "The Cash Flow Sensitivity of Cash," Journal of Finance, American Finance Association, vol. 59(4), pages 1777-1804, 08.
    7. Stijn Claessens & Simeon Djankov & Joseph P. H. Fan & Larry H. P. Lang, 2002. "Disentangling the Incentive and Entrenchment Effects of Large Shareholdings," Journal of Finance, American Finance Association, vol. 57(6), pages 2741-2771, December.
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