 Institutional environment and firms' sources of financial capital in Central and Eastern EuropeDan Li and Manuel Ferreira () Journal of Business Research, 2011, vol. 64, issue 4, 371-376 Abstract: The external business environment is a major determinant of which sources firms select to obtain financial capital. We examine how the regulatory, political, and financial dimensions of the institutional environment influence the extent to which firms rely on informal sources of financial capital. The analyses of data from 2869 firms in twenty-six transition economies in Central and Eastern Europe (CEE) indicate that ineffective regulatory system, underdeveloped financial system, and government corruption are strong determinants of firms' reliance on informal channels for financial capital. We also find that smaller firms are more vulnerable when the local financial system is underdeveloped and the regulatory institutions are less effective in these transition economies. A subgroup analysis of firms' forms of establishment shows that private firms are sensitive to the level of development of the local financial system and state-owned enterprises are particularly sensitive to the degree of corruption. Keywords: Financial; capital; Institutional; environment; Network; Transition; economies (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:64:y:2011:i:4:p:371-376 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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