The effects of financial frictions on Slovenian companies : a panel VAR approach

Zabavnik, Darja (avtor), Verbič, Miroslav (avtor)

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.

• Jezik: Angleški jezik
• Ključne besede: enterprises, investments, economic forecasting, models, balance sheet channel, financial frictions, business investment, transmission channels, panel VAR approach
• Vrsta gradiva: Članek v reviji
• Tipologija: 1.01 - Izvirni znanstveni članek
• Organizacija: EF - Ekonomska fakulteta
• Status publikacije: Objavljeno
• Različica publikacije: Objavljena publikacija
• Leto izida: 2023
• Št. strani: 16 str.
• Številčenje: Vol. 58, pt. C, art. 104563
• PID: 20.500.12556/RUL-152935
• UDK: 336
• ISSN pri članku: 1544-6123
• DOI: 10.1016/j.frl.2023.104563
• COBISS.SI-ID: 167898627
• Datum objave v RUL: 12.12.2023

Gradivo je del revije

• Naslov: Finance research letters
• Založnik: Elsevier
• ISSN: 1544-6123
• COBISS.SI-ID: 518506777

Licence

• Licenca: CC BY-NC-ND 4.0, Creative Commons Priznanje avtorstva-Nekomercialno-Brez predelav 4.0 Mednarodna
• Povezava: http://creativecommons.org/licenses/by-nc-nd/4.0/deed.sl
• Opis: Najbolj omejujoča licenca Creative Commons. Uporabniki lahko prenesejo in delijo delo v nekomercialne namene in ga ne smejo uporabiti za nobene druge namene.

Sekundarni jezik

• Jezik: Slovenski jezik
• Ključne besede: podjetje, investicije, modeli, ekonomska predvidevanja, modeli

Projekti

• Financer: Drugi - Drug financer ali več financerjev
• Program financ.: Institute for Economic Research

• Financer: ARRS - Agencija za raziskovalno dejavnost Republike Slovenije
• Številka projekta: P5-0096
• Naslov: Razvojna strategija Slovenije kot članice Evropske unije