The Main Changes in Financial Behaviour of Firms in Transition Economy: An Estonian Case

Kaja Lutsoja () and Margus Lutsoja
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Kaja Lutsoja: Department of Economics at Tallinn University of Technology

No 113, Working Papers from Tallinn School of Economics and Business Administration, Tallinn University of Technology

Abstract: The main objective of this paper is to analyze main changes of financial behaviour of Estonian companies in the period of economic transition in Estonia from 1994 to 2002. Empirical results of Estonian firmsí interview study, undertaken annually during 1994-2003, are presented in the paper. Other sources used in preparation of this paper are derived from publicly disclosed statistics of financial institutions and different financial instruments. The analyze concentrates on informal borrowing and lending in comparison of average interest rate being applicable on official lending from Estonian commercial banks. There exists strong tendency of decrease of informal lending and borrowing. If the informal borrowing was mentioned as an important source of financing in the questionnaires of mid-1990, it has become insignificant in last questionnaires. The same can be seen in lending to own employees together with increase in availability of the loans to ìordinaryî people the lending from employer has decreased.

Keywords: firmsí financial behaviour; neoclassical theory; post-Keynesian theory sources of financing; contractual obligations; payment terms. (search for similar items in EconPapers)
JEL-codes: G32 L20 (search for similar items in EconPapers)
Pages: 17
Date: 2004
Note: Support from the Estonian Science Foundation (project 5185) is greatly acknowledged by authors of the paper.
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Published in Working Papers in Economics.School of Economics and Business Administration,Tallinn University of Technology (TUTWPE), Pages 153-169

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