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Financing Constraints and Firm Growth in Emerging Europe

Author

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  • Leitner Sandra M.

    (Vienna Institute for International Economic Studies)

Abstract

The paper aims to shed light on the effects of different types of financing constraints on firm sales and employment growth in Emerging Europe before and after the onset of the financial crisis. It analyzes the group of emerging NMS-10 economies (plus Turkey) and the group of economically and financially lagging Western Balkan countries. The paper demonstrates that financing constraints significantly obstruct firm growth, particularly in the Western Balkan countries, which calls for policy intervention to ensure swifter job-rich growth and catching-up with the rest of Europe. It also emphasizes that particular firm characteristics are essential for growth in Emerging Europe and demonstrates that exporting only and innovating are recipes for faster firm growth, while importing only and a high foreign ownership share seriously retard firm growth. Finally, it stresses the importance of the particular institutional environment for firms to thrive.

Suggested Citation

  • Leitner Sandra M., 2016. "Financing Constraints and Firm Growth in Emerging Europe," South East European Journal of Economics and Business, Sciendo, vol. 11(1), pages 18-40, April.
    • Handle: RePEc:vrs:seejeb:v:11:y:2016:i:1:p:18-40:n:2
    DOI: 10.1515/jeb-2016-0002
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    Cited by:

    1. Moder, Isabella & Bonifai, Niccolò, 2017. "Access to finance in the Western Balkans," Occasional Paper Series 197, European Central Bank.
    2. Pranvera Dalloshi, 2018. "The Nexus between Bank Sources and Firms Capital Expenditures in SEE Countries," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 255-267, OCTOBER.
    3. Mirgul Nizaeva & Ali Coskun, 2019. "Investigating the Relationship Between Financial Constraint and Growth of SMEs in South Eastern Europe," SAGE Open, , vol. 9(3), pages 21582440198, September.

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