Determinants of firm investment: Evidence from Slovenian firm-level data

Črt Lenarčič and Georgios Papadopoulos

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the role of corporate balance sheet positions in determining Slovenian firms' investment behaviour. The analysis is based on the theoretical framework of the financial accelerator which suggests that firms' financial positions influence their real behaviour. The underlying hypotheses of the financial accelerator are tested, namely its asymmetric effect during crises and in respect to firms' size. In addition, the existence of differences in the relationship between the balance sheet variables and investment across various sectors is examined. The results indicate that indeed balance sheet strength is an important determinant of Slovenian firms' investment behaviour. Moreover, this relationship is affected by a firm's size but the effect of the crisis or its sectoral specialization do not seem to materially affect it.

Keywords: Firm investment; financial accelerator; firm-level data (search for similar items in EconPapers)
JEL-codes: C33 D22 E22 (search for similar items in EconPapers)
Date: 2020-04-18
New Economics Papers: this item is included in nep-acc, nep-bec, nep-cfn, nep-mac and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Determinants of Firm Investment: Evidence from Slovenian Firm-Level Data (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:100478

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