Determinants of Financial Constraints: The Effect of Financial Crisis and Heterogeneity Across Industries

Ponikvar, Nina; Kejžar, Katja Zajc; Mörec, Barbara

doi:10.1080/1331677x.2013.11517639

Cited by 11 publications

(14 citation statements)

References 29 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It is worth noting that capital expenditure has a positive effect on CCC only for small enterprises. The results suggest that although small enterprises are more likely to have financing problems (Beck & Demirguq-kunt, 2005;Hadlock & Pierce, 2010;Ponikvar et al, 2013), but their CCC becomes longer when these enterprises allocate higher capital expenditure. Our descriptive statistics reveal that the average cash cycle is 155 days for small enterprises and only 89 days for large enterprises.…”

Section: The Effects Of Enterprise Size and Age On The Determinants Of Working Capital Managementmentioning

confidence: 92%

“…In this respect, smaller enterprises likely have more significant financing constraints than larger enterprises (Beck & Demirguq-kunt, 2005;Hadlock & Pierce, 2010;Ponikvar et al, 2013). Creditors often consider larger enterprises more creditworthy than smaller enterprises because of sufficient collateral (Maina & Ishmail, 2014;Mule, Mukras, & Nzioka, 2015) that cause larger enterprises to enjoy more convenient access to financing sources and lower costs of capital than smaller enterprises (Kurshev & Strebulaev, 2015).…”

Section: Working Capital Managementmentioning

confidence: 99%

“…Several previous studies demonstrate that more significant and older enterprises exhibit better financing ability because they can access financing sources more efficiently and with lower costs (Koh, Duran, Dai, & Chang, 2015;Agustini, 2016). On the contrary, smaller and younger enterprises tend to experience financing constraints (Beck & Demirguq-kunt, 2005;Hadlock & Pierce, 2010;Ponikvar, Zajc Kejzar, & Morec, 2013). Thus, when confronted with leverage, enterprise growth, capital expenditure, operating cash flow, and macroeconomic condition problems, smaller and younger enterprises are more likely to manage their working capital efficiently by shortening their receivable and inventory turnovers than more substantial and older enterprises that are better able to secure financing sources.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The Determinants of Working Capital Management: The Contextual Role of Enterprise Size and Enterprise Age

Nastiti

Atahau

Supramono

2019

Business, Management and Education

View full text Add to dashboard Cite

Purpose – working capital management plays a vital role in determining the continuity of enterprises’ business activities. Enterprises should manage their working capital efficiently to avoid excessive working capital investments and at the same time, to maintain their liquidity. This study aims to examine the determinants of working capital management and to test the different effects of the determinants of working capital management based on enterprise size and enterprise age. Research methodology – the sample consists of 117 manufacturing enterprises listed at the Indonesian Stock Exchange for the years 2010–2017. Panel data regression was used to test the hypothesis. Findings – the findings reveal that sales growth and economic growth determine working capital management. However, the effects of the determinants of working capital management differ depending on enterprise size and enterprise age. Specifically, economic growth is the only determinant that exhibits different effects on working capital management between different enterprise size and enterprise age subsamples. Meanwhile, besides economic growth, capital expenditure, and operating cash flow are the other enterprise-specific determinants that exhibit different effects on working capital management between the two enterprise age subsamples. Research limitations – this study only measures enterprise size with total assets. Thus, we advise future studies to complement this proxy with other measures such as market value and the listing size criterion (main board vs development board). Further, it is necessary to analyse the non-linear relationship between leverage and working capital management to explain the positive effect of leverage on working capital management. Practical implications – the empirical results suggest that manufacturing enterprises must focus more on their sales growth because it affects their ability to manage their working capital efficiently. Besides, younger manufacturing enterprises need to shorten their cash cycles that are longer relative to old enterprises. Originality/Value – no previous studies have analysed the determinants of working capital management based on enterprise characteristics, especially enterprise size and age. Specifically, in the scientific literature, enterprise size and enterprise age mainly act as the dependent variables.

show abstract

Section: The Effects Of Enterprise Size and Age On The Determinants Of Working Capital Managementmentioning

confidence: 92%

Section: Working Capital Managementmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The Determinants of Working Capital Management: The Contextual Role of Enterprise Size and Enterprise Age

Nastiti

Atahau

Supramono

2019

Business, Management and Education

View full text Add to dashboard Cite

show abstract

“…Quartey et al (2017) show that exporting SMEs have better access to bank loans. In connection with this, Ponikvar, Kejzar and Morec (2013) provide evidence that productivity and export orientation positively affected access to external funds during the financial crisis of 2007-2008. The authors argue that productivity and export orientation improve the financial health of the firm.…”

Section: Introductionmentioning

confidence: 88%

Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

Erdogan

2019

Economic Research-Ekonomska Istraživanja

View full text Add to dashboard Cite

To contribute to the small and medium-sized enterprises (SMEs) financing literature, this paper uses a unique sample of 492 Turkish SMEs to analyse the firm-level determinants of SME perceptions of bank financing accessibility. Logistic regression results reveal that older and relatively more innovative firms are more positive about their ability to secure bank loans, as are SMEs that have longer relationships with their oldest banks. Firms with two owners are more inclined than firms with a single owner and firms with three or more owners to perceive accessing bank loans as easy. This finding signals that although bank loan applications of firms with two owners have higher credibility than those of firms with a single owner, having more than two owners creates more complex agency problems for banks. Compared with firms incurring a loss, firms that make a profit or break even perceive it to be easier to obtain bank financing. SMEs in the service industry are more positive about accessing bank loans than are firms in manufacturing and other industries.

show abstract

“…Beside structural risk, some degree of higher information opacity is attributed to the firm's strategy. Exporting firms are better able to diversify their sources of financing through national and international channels and they have superior performance to generate significant cash flow (Ponikvar et al, 2013). Thus, it is possible that exporting decreases discouragement through better serviceability and financing options.…”

Section: -3 Control Variablesmentioning

confidence: 99%

Discouraged borrowers aftermath of financial crisis: a UK study

Rostamkalaei

2017

JSBED

View full text Add to dashboard Cite

PurposeThe purpose of this paper is to investigate the trend of discouragement in the SME's lending market during the aftermath of the financial crisis of 2008. It detects the extent to which the responses of discouraged firms to improvements in the lending market are lagged. Design/methodology/approachThe results are based on surveys of UK SME Finance Monitor (2011)(2012)(2013)(2014)(2015)(2016). Probit regression models were used to assess the effect of time passed from the financial crisis on the probability of discouragement. FindingsThe analysis, inter alia, shows that the rate of discouragement has reduced significantly since 2013. The results highlight the long-term effect of tightened credit supply on SMEs that are ready to invest, but hold back because of fear of rejection. Practical implicationsThe research suggests addressing imperfect information among discouraged SMEs that are recuperating from the financial crisis. With the rise of information asymmetry, entrepreneurs show a higher level of fear of rejection by financial institutions. The longer the effects of the financial crisis exists among entrepreneurs, the longer they self-ration from credit market, which subsequently leads to reduced levels of investment, growth, and innovation among SMEs. Originality/valueThis research fills a gap in the literature of the effect of financial crisis on the latent demand for lending. It discusses the long-term effect of tightened credit supply among entrepreneurs even though the supply side has recuperated and recommenced pre-crisis activities.

show abstract

Determinants of Financial Constraints: The Effect of Financial Crisis and Heterogeneity Across Industries

Cited by 11 publications

References 29 publications

The Determinants of Working Capital Management: The Contextual Role of Enterprise Size and Enterprise Age

The Determinants of Working Capital Management: The Contextual Role of Enterprise Size and Enterprise Age

Determinants of perceived bank financing accessibility for SMEs: evidence from an emerging market

Discouraged borrowers aftermath of financial crisis: a UK study

Contact Info

Product

Resources

About