Work detail

The determinants of access to finance. Evidence for transition economies

Author: Mgr. Alina Cazachevici
Year: 2013 - summer
Leaders: prof. Roman Horváth Ph.D., ČSOB Corporate Chair
Consultants:
Work type: Masters
MEF
Language: English
Pages: 67
Awards and prizes: M.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance.
Link:
Abstract: The thesis provides an empirical analysis of impact of country-level and firm-level
determinants on access to finance in transition economies. Generalized Ordered Logit
model is applied on survey data for transition countries, combined with financial
market indicators. The results show that higher concentration in banking sector, as
well as higher financial deepening have a positive impact on access to finance, while
volatile macroeconomic environment, higher implication of foreign-owned and stateowned
banks seems to be perceived as increasing obstacles in accessing external
financing. Combining indexes for liberalization in banking sector and liberalization
of securities markets proved that before liberalization process firms had better access
to finance. One of the possible explanations is that before liberalization state banks
were forced by politicians to issue more loans, while after reforms the political
pressure was removed, imposing stricter conditions for loan granting. Inclusion of
corruption variable yields expectable results that higher corruption level is associated
with worse access to finance. The results for firm-level variables indicate that larger
firms and firms from service sector benefits from better access to finance. Also,
companies that apply for an external audit face fewer obstacles in accessing finance,
than those that do not. Inclusion of control variable for crisis period increases the
consistency and robustness of results.

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