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Comparing the Impact of Credit Constraints on the Growth of SMEs in a Transition Country with an Established Market Economy

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  • John Hutchinson
  • Ana Xavier

Abstract

In this paper we compare the role of internal finance on the growth of firms between a leading transition country, Slovenia and an established market economy, Belgium. We find that firms in Slovenia are more sensitive to internal financing constraints than their Belgian counterparts. This would suggest that although Slovenian firms are no longer recipients of soft budget constraints, capital markets are not yet functioning properly.

Suggested Citation

  • 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.
    • Handle: RePEc:lic:licosd:15004
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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