Perception and Drivers of Financial Constraints for the Sustainable Development

Tamara Teplova, Tatiana Sokolova, Mariya Gubareva (), Kristina Galenskaya and Andrey Teplov
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Tamara Teplova: Department of Financial Market Infrastructure, Faculty of Economic Sciences, National Research University Higher School of Economics, 109028 Moscow, Russia
Tatiana Sokolova: Department of Financial Market Infrastructure, Faculty of Economic Sciences, National Research University Higher School of Economics, 109028 Moscow, Russia
Kristina Galenskaya: Department of Financial Market Infrastructure, Faculty of Economic Sciences, National Research University Higher School of Economics, 109028 Moscow, Russia
Andrey Teplov: Department of Financial Market Infrastructure, Faculty of Economic Sciences, National Research University Higher School of Economics, 109028 Moscow, Russia

Sustainability, 2020, vol. 12, issue 17, 1-29

Abstract: Financial market imperfections constrain firms’ ability to obtain funds. This is especially true for the former communist bloc countries. However, the restrictions on access to financing and the attitudes of management in these geographies remain overlooked by academic research and represent an important obstacle on the roadmap to sustainable development. The objective of this paper is to fill this gap by analyzing the impact of ownership structure, institutional environment development, and debt market profile on the perception of financial constraints by the representatives of corporate top management from 28 countries of the former communist bloc. Our analysis spans over the period 2002–2013. We apply the probit and Heckman models to investigate nonlinear and multicast effects of the considered factors. We evidence that during the crisis and post-crisis periods, foreign ownership alleviates the restrictions on access to financial resources. We also discuss the role of state ownership. We find that the volume of local currency bond market has a nonlinear U-shape relationship. Our results are useful for policy makers focused on sustainable development of the former communist economies by means of improving access of businesses to financing.

Keywords: financial constraints; sustainable development; ownership structure; state subsidies; former communist bloc; institutional environment; financial system (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:17:p:7217-:d:408410

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