Trade Credit and Bank Finance – Evidence from the Visegrad Group

Rahman, Ashiqur; Rózsa, Zoltán; Čepel, Martin

doi:10.7441/joc.2018.03.09

Cited by 32 publications

(21 citation statements)

References 25 publications

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“…It is believed that those who are more financially savvy are more likely to be active in financial decisions such as saving and investing when they are at working stage in terms of accumulating wealth for their retirement stage ( Jappelli & Padula, 2015a). In agreement with this view, Calcagno & Monticone (2014) suggest that individual investors should learn about finance to support them to make right financial decisions and optimal investment choices (Capuano & Ramsay, 2011;Rahman et al, 2018). In addition, Capuano & Ramsay (2011) argue convincingly that using financial products and services as well as accessing financial markets can be related to the customer's financial literacy.…”

Section: Theoretical Backgroundmentioning

confidence: 96%

Financial Literacy and Financial Advice Seeking for Retirement Investment Choice

Nguyen¹,

Rózsa²

2019

JOC

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The research investigates the effects of the degree of financial literacy on financial advice seeking for retirement investment choice as well as assesses the level of financial literacy of Vietnamese employees. An empirical research was conducted by examining 314 individuals who are currently at working stage. This current work also contributes to the present literature by exploring whether the relationship between financial literacy and seeking out advice is a substitute or complementary relationship. The estimation techniques applied in this resaerch are statistics descriptive analysis and two-stage least squares (2SLS) regression. The results of our statistics descriptive analysis indicated that Vietnamese employees have a moderate level of basic and advanced financial literacy. After addressing the endogenous problem by running a two-stage least squares (2SLS) regression, results show that both basic financial knowledge and advanced financial knowledge are positively correlated with financial advice seeking for retirement investment choice. This result also supports the evidence that this relationship may be considered a complementary one. Hence it is recommended that policy makers should concede that along with financial literacy, financial advice ought to be perceived as a complementary mechanism to assist individuals to make informed retirement investment choices.

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Section: Theoretical Backgroundmentioning

confidence: 96%

Financial Literacy and Financial Advice Seeking for Retirement Investment Choice

Nguyen¹,

Rózsa²

2019

JOC

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“…Relationship lending, the most common techniques for lending to small firms, is based on the "soft" information which is accessible by keeping a close relationship with the client (Rahman et al, 2018;Sobeková Majková, 2016;Ključnikov et al, 2016). Alternatively, there exist transaction-based lending techniques, those are mainly based on the "hard" information about the businesses.…”

Section: Literature Reviewmentioning

confidence: 99%

Quantified impact of market interest rates on commercial banks’ business mix

Kostikov¹,

Jílková²,

Stránská³

2019

Journal of International Studies

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The main aim of this paper is to measure the influence of market interest rate on commercial banks' business mix. The global character of banking business and the conditions of the world economy have caused extremely low interest rates at the loan and mortgage market in Czech Republic. Low interest rates generate cheaper money and make loans and mortgages easily available since 2014 where the mortgage interest rate dropped below the level of 2.5%. The first aim of this research is to evaluate the effect from different types of interest rates on two types of loan products in this five-year period (2014-2018). The second aim of this research is to analyse the effect from the selected interest rates in Czech Republic on profitability of the selected commercial banks. Lastly, profitability behaviour of the banking sector in Czech Republic and its relation with the selected interest rates and bank-specific determinants has been examined. Our final results state that the consumption interest rate, mortgage interest rate, deposit interest rate, PRIBOR 2w-repo, inflation rate, disposable income, unemployment, GDP and the real effective exchange rate (REER) have significant influence on the volume of mortgage loans and consumer loans too. The authors find that banks´ ROE is affected by profit margin and liquidity, but it is negatively related to financial leverage and the

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“…Our results suggest that the concentration ratio (Cr) has a positive impact on the cost of credit for micro firms, while a negative effect on the small and medium firms. It could be the fact the in a concentrated market micro firms have fewer alternative options for loans and more importantly, micro firms may not be able to get loans with lower rates not only because of information opacity but also due to their limited capacity in providing collateral or business guarantee [39,40]. The results for Lerner index suggest that in a concentrated market micro firms provide a lower cost of credit than of the small or medium firms.…”

Section: Empirical Results By Firm Information Opacitymentioning

confidence: 96%

The Effect of Bank Competition on the Cost of Credit: Empirical Evidence from the Visegrad Countries

2019

APH

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The effects of bank competition on the cost of credit are a much-debated topic in Small and Medium enterprises financing. In this paper, we would like to examine the relationship between the cost of credit and interbank-competition in the context of Visegrad countries-the Czech Republic, Poland, Hungary, and the Slovak Republic. The dataset of this paper comes from two different sources, the firm level data provided by the latest version of the Business Environment and Enterprise Performance Survey that was conducted by the European Bank for Reconstruction and Development and the World Bank during 2012 to 2014, and the country level bank competition measures are collected from the Global Financial Database, updated in 2017 [3]. We have examined bank competition with four measures, including structural bank concentration measure and three nonstructural (Lerner Index, H-Statistics, and Boone Index) measures. We find evidence that bank competition has a positive effect on the cost of credit and hence, our results are in-line with prior literature on information-based theories of bank competition. We have also assessed the firms in terms of their information opacity (micro, small, and medium), and we find that the cost of credit is higher for the information opaque firms. Thus, firm sizes have important implications for bank competition and cost of credit.

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Trade Credit and Bank Finance – Evidence from the Visegrad Group

Cited by 32 publications

References 25 publications

Financial Literacy and Financial Advice Seeking for Retirement Investment Choice

Financial Literacy and Financial Advice Seeking for Retirement Investment Choice

Quantified impact of market interest rates on commercial banks’ business mix

The Effect of Bank Competition on the Cost of Credit: Empirical Evidence from the Visegrad Countries

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