Capital investment and determinants of financial constraints in Estonia

Hobdari, Bersant; Jones, Derek C.; Mygind, Niels

doi:10.1016/j.ecosys.2009.05.004

Cited by 29 publications

(29 citation statements)

References 29 publications

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“…These criteria have, however, been criticized because they fail to take into account the fact that firms may transit between states in which they face binding financial constraints and states in which they do not. To take account of this shortcoming, Ariyo and Adelegan (2008); Hobdari, Jones and Mygind (2009) used switching regression method while Cleary (1999) constructed Z-score financial constraint beginning from discriminant analysis that allows the firm to transit over the year from financially constrained state to financially unconstrained state.…”

Section: Methodological Literature Reviewmentioning

confidence: 99%

Firm Financial Status and Investment Behaviour: Evidence from Manufacturing Firms in Nigeria

Aminu

Raifu

2019

Zagreb International Review of Economics and Business

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The study examines firm’s investment behaviour sensitivity to cash flow before, during and after the recent global financial crisis using the data of 28 firms listed on the Nigerian Stock Market during the period from 2001 to 2012. The contribution of the study to the existing literature rests on using financial crisis as basis for classifying firms as either financially constrained or unconstrained. Employing the panel data and instrumental variable estimation techniques, the study finds that firms’ investment behaviour sensitivity to cash flow was higher during the financial crisis than before or after the financial crisis. In other words, Nigerian firms were highly financially constrained during the last financial crisis.

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Section: Methodological Literature Reviewmentioning

confidence: 99%

Firm Financial Status and Investment Behaviour: Evidence from Manufacturing Firms in Nigeria

Aminu

Raifu

2019

Zagreb International Review of Economics and Business

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“…The switching regression approach allows using multiple variables to predict whether a firm is constrained or unconstrained. 16 Following the existing investment literature we employed similar sets of variables as those used by Almeida and Campello (2007), Hobdari et al (2009), andTitman (2006) to identify financial constraints in the context of transition economies. Table 6 briefly summarizes the determinants we find relevant for firms operating in transition economies and their expected signs.…”

Section: Where Does the Stability Come From?mentioning

confidence: 99%

A stubborn persistence: Is the stability of leverage ratios determined by the stability of the economy?

Hanousek

Shamshur

2011

Journal of Corporate Finance

109

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“…The disagreements about the relationship between age and the growth of firms in the extant literature can be explained partly by the multi-dimensionality and complexity of the phenomenon of growth, especially in small firms. For instance, some previous empirical studies suggest a positive effect of firm age on growth (Das, 1995;Elston, 1993), while others have shown a negative relation between the variables (Almeida & Campello, 2007;Becchetti & Trovato, 2002;Hobdari, Derek & Mygind, 2009). Given the resource-based hypothesis, as firms get older, theoretically, it is likely that their access to financial resources will improve.…”

Section: Agementioning

confidence: 99%

The Impact of Financing Pattern on Firm Growth: Evidence from Swedish Micro Firms

Yazdanfar¹

2012

IBR

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This study examines the impact of financial structures on the growth of micro firms in Sweden. The objective of this paper is to explore whether firms' growth can be associated with patterns of financial acquisition and whether these patterns influence firms' growth differently when the source is either internal or external. Based on agency cost theory, hypotheses were formulated and tested with panel data consisting of 12 101 micro firms, using 84 707 observations for the period 2006-2007. The data were analysed using the seemingly unrelated regression (SUR) model. The empirical results reveal that internal financial sources -retained profitsignificantly influence firm growth. Similarly, short-term debt and growth are positively related. However, firm growth is generally more sensitive to retained profit than short-term debt. Interestingly, long-term debt generally has no effect on growth. The findings also indicate that size, age, and industry affiliation influence firm growth. Finally, agency cost theory is relevant in explaining the relationship between financing pattern and growth.

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Capital investment and determinants of financial constraints in Estonia

Cited by 29 publications

References 29 publications

Firm Financial Status and Investment Behaviour: Evidence from Manufacturing Firms in Nigeria

Firm Financial Status and Investment Behaviour: Evidence from Manufacturing Firms in Nigeria

A stubborn persistence: Is the stability of leverage ratios determined by the stability of the economy?

The Impact of Financing Pattern on Firm Growth: Evidence from Swedish Micro Firms

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