ǂThe ǂeffects of financial frictions on Slovenian companies

ǂa ǂpanel VAR approach

Darja Zabavnik (Avtor), Miroslav Verbič (Avtor)

Povzetek

In this paper, we investigate the impact of imperfect financial markets on the business investment of Slovenian non-financial companies. We focus on exploring the borrower’s balance sheet channel, through which companies' worsening balance sheets, reduce the availability of external finance. The effects of exogenous shocks are, therefore, amplified through the financial accelerator mechanism and affect the overall economy. Using data from annual reports of Slovenian non-financial companies from 2005 to 2020, we estimate a panel VAR model on various sample definitions. The results confirm the existence of the balance sheet channel, as the impulse response of investment to cash flow shocks is statistically significant. This effect is especially noticeable during the period from 2006 to 2012. Our findings suggest that financial frictions affect the availability of external financing and, consequently, the investment activity of Slovenian non-financial companies. Policymakers should prioritize measures to ensure adequate external financing, particularly for financially constrained firms, to mitigate the negative impact of reduced economic activity during periods of financial distress and economic downturns.

Ključne besede

podjetje;investicije;modeli;ekonomska predvidevanja;enterprises;investments;economic forecasting;models;

Podatki

Jezik:	Angleški jezik
Leto izida:	2023
Tipologija:	1.01 - Izvirni znanstveni članek
Organizacija:	UL EF - Ekonomska fakulteta
UDK:	336
COBISS:	167898627
ISSN:	1544-6123
Št. ogledov:	22
Št. prenosov:	6
Ocena:	0 (0 glasov)
Metapodatki:

Ostali podatki

Sekundarni jezik:	Slovenski jezik
Sekundarne ključne besede:	podjetje;investicije;modeli;ekonomska predvidevanja;modeli;
Vrsta dela (COBISS):	Članek v reviji
Strani:	16 str.
Letnik:	ǂVol. ǂ58 (part C)
Zvezek:	ǂart. ǂ104563
Čas izdaje:	Dec. 2023
DOI:	10.1016/j.frl.2023.104563
ID:	21654736