A Firm-Level Analysis of Small and Medium Size Enterprise Financing in Poland
The authors test competing theories of capital structure choices using firm-level data on firm borrowings. The majority of firms in the dataset are privately owned, young, micro or small and medium enterprise (SME) firms concentrated in the service sector. In general, the financing pattern of firms...
| Main Authors: | , , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2006/08/6969584/firm-level-analysis-small-medium-size-enterprise-financing-poland http://hdl.handle.net/10986/8352 |
| id |
okr-10986-8352 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-83522021-04-23T14:02:41Z A Firm-Level Analysis of Small and Medium Size Enterprise Financing in Poland Klapper, Leora Sarria-Allende, Virginia Zaidi, Rida ACCOUNTING AGRICULTURE ANNUAL SALES ASSET SUBSTITUTION ASSETS ASYMMETRIC INFORMATION BANK LENDING BANKRUPTCY BORROWING BUSINESS ENVIRONMENT COMMERCIAL BANKS COMPANY COMPETITIVENESS CORPORATE GOVERNANCE CORPORATE INCOME TAXES CORPORATE PERFORMANCE CORPORATION CORPORATIONS COST OF CAPITAL CREDIT RATIONING CREDITOR PROTECTION DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EAST EUROPEAN EMPLOYMENT ENTREPRENEURS EXPROPRIATION EXTERNAL FINANCING FINANCIAL INFORMATION FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL STRUCTURES FIRM SIZE FIRMS FUTURE CASH FLOWS GDP GDP PER CAPITA GROSS MARGIN GROWTH RATE INTEREST RATE INVESTMENT ACTIVITIES INVESTMENT DECISIONS JOB CREATION LIQUIDITY LIQUIDITY CONSTRAINTS LISTED COMPANIES MARGINAL VALUE MEDIUM ENTERPRISES NPV OWNERSHIP STRUCTURE POLITICAL ECONOMY PRIVATE INVESTORS PROFITABILITY PROPERTY RIGHTS REGRESSION ANALYSIS RISKY INVESTMENTS ROA SECURE PROPERTY RIGHTS SHAREHOLDERS SMALL FIRMS SME SME FINANCING SME LENDING SME SECTOR SOFT BUDGET CONSTRAINTS STATE OWNED ENTERPRISES STATEMENTS SUPPLIERS TAXATION TERM FINANCE TRADE CREDIT TRANSITION ECONOMIES TRANSITION ECONOMY TRANSPARENCY The authors test competing theories of capital structure choices using firm-level data on firm borrowings. The majority of firms in the dataset are privately owned, young, micro or small and medium enterprise (SME) firms concentrated in the service sector. In general, the financing pattern of firms is low leverage ratios and, in particular, low levels of intermediated financing and long-term financing. Average firm growth rates decreased during the five years of the sample period. Average profitability growth ratios are also negative across age and sectors and large firms have the highest negative profit growth rates. Statistical tests find a positive firm size effect on financial intermediation. Larger firms have higher leverage ratios (both short term and long term), including higher use of trade credit. There is also a negative influence of profitability on leverage ratios (more profitable firms use less external financing), which supports the "pecking order" theory that in environments with greater asymmetric information (such as weaker credit information) firms prefer to use internal or inter-firm financing. Finally, firms operating in a competitive environment have higher leverage ratios. For instance, young, small firms are the most active employment generators in the Polish economy. In particular, the authors find that although SMEs seem to be very active in creating jobs in recent years. This suggests that a new type of firm is emerging that is more market and profit-oriented. But at the same time, these firms appear to have financial constraints that impede their growth. Improvements in the business environment, such as better credit and registry information, could help promote growth in this sector. 2012-06-18T20:34:54Z 2012-06-18T20:34:54Z 2006-08 http://documents.worldbank.org/curated/en/2006/08/6969584/firm-level-analysis-small-medium-size-enterprise-financing-poland http://hdl.handle.net/10986/8352 English Policy Research Working Paper; No. 3984 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia Poland |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING AGRICULTURE ANNUAL SALES ASSET SUBSTITUTION ASSETS ASYMMETRIC INFORMATION BANK LENDING BANKRUPTCY BORROWING BUSINESS ENVIRONMENT COMMERCIAL BANKS COMPANY COMPETITIVENESS CORPORATE GOVERNANCE CORPORATE INCOME TAXES CORPORATE PERFORMANCE CORPORATION CORPORATIONS COST OF CAPITAL CREDIT RATIONING CREDITOR PROTECTION DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EAST EUROPEAN EMPLOYMENT ENTREPRENEURS EXPROPRIATION EXTERNAL FINANCING FINANCIAL INFORMATION FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL STRUCTURES FIRM SIZE FIRMS FUTURE CASH FLOWS GDP GDP PER CAPITA GROSS MARGIN GROWTH RATE INTEREST RATE INVESTMENT ACTIVITIES INVESTMENT DECISIONS JOB CREATION LIQUIDITY LIQUIDITY CONSTRAINTS LISTED COMPANIES MARGINAL VALUE MEDIUM ENTERPRISES NPV OWNERSHIP STRUCTURE POLITICAL ECONOMY PRIVATE INVESTORS PROFITABILITY PROPERTY RIGHTS REGRESSION ANALYSIS RISKY INVESTMENTS ROA SECURE PROPERTY RIGHTS SHAREHOLDERS SMALL FIRMS SME SME FINANCING SME LENDING SME SECTOR SOFT BUDGET CONSTRAINTS STATE OWNED ENTERPRISES STATEMENTS SUPPLIERS TAXATION TERM FINANCE TRADE CREDIT TRANSITION ECONOMIES TRANSITION ECONOMY TRANSPARENCY |
| spellingShingle |
ACCOUNTING AGRICULTURE ANNUAL SALES ASSET SUBSTITUTION ASSETS ASYMMETRIC INFORMATION BANK LENDING BANKRUPTCY BORROWING BUSINESS ENVIRONMENT COMMERCIAL BANKS COMPANY COMPETITIVENESS CORPORATE GOVERNANCE CORPORATE INCOME TAXES CORPORATE PERFORMANCE CORPORATION CORPORATIONS COST OF CAPITAL CREDIT RATIONING CREDITOR PROTECTION DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EAST EUROPEAN EMPLOYMENT ENTREPRENEURS EXPROPRIATION EXTERNAL FINANCING FINANCIAL INFORMATION FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL STRUCTURES FIRM SIZE FIRMS FUTURE CASH FLOWS GDP GDP PER CAPITA GROSS MARGIN GROWTH RATE INTEREST RATE INVESTMENT ACTIVITIES INVESTMENT DECISIONS JOB CREATION LIQUIDITY LIQUIDITY CONSTRAINTS LISTED COMPANIES MARGINAL VALUE MEDIUM ENTERPRISES NPV OWNERSHIP STRUCTURE POLITICAL ECONOMY PRIVATE INVESTORS PROFITABILITY PROPERTY RIGHTS REGRESSION ANALYSIS RISKY INVESTMENTS ROA SECURE PROPERTY RIGHTS SHAREHOLDERS SMALL FIRMS SME SME FINANCING SME LENDING SME SECTOR SOFT BUDGET CONSTRAINTS STATE OWNED ENTERPRISES STATEMENTS SUPPLIERS TAXATION TERM FINANCE TRADE CREDIT TRANSITION ECONOMIES TRANSITION ECONOMY TRANSPARENCY Klapper, Leora Sarria-Allende, Virginia Zaidi, Rida A Firm-Level Analysis of Small and Medium Size Enterprise Financing in Poland |
| geographic_facet |
Europe and Central Asia Poland |
| relation |
Policy Research Working Paper; No. 3984 |
| description |
The authors test competing theories of capital structure choices using firm-level data on firm borrowings. The majority of firms in the dataset are privately owned, young, micro or small and medium enterprise (SME) firms concentrated in the service sector. In general, the financing pattern of firms is low leverage ratios and, in particular, low levels of intermediated financing and long-term financing. Average firm growth rates decreased during the five years of the sample period. Average profitability growth ratios are also negative across age and sectors and large firms have the highest negative profit growth rates. Statistical tests find a positive firm size effect on financial intermediation. Larger firms have higher leverage ratios (both short term and long term), including higher use of trade credit. There is also a negative influence of profitability on leverage ratios (more profitable firms use less external financing), which supports the "pecking order" theory that in environments with greater asymmetric information (such as weaker credit information) firms prefer to use internal or inter-firm financing. Finally, firms operating in a competitive environment have higher leverage ratios. For instance, young, small firms are the most active employment generators in the Polish economy. In particular, the authors find that although SMEs seem to be very active in creating jobs in recent years. This suggests that a new type of firm is emerging that is more market and profit-oriented. But at the same time, these firms appear to have financial constraints that impede their growth. Improvements in the business environment, such as better credit and registry information, could help promote growth in this sector. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Klapper, Leora Sarria-Allende, Virginia Zaidi, Rida |
| author_facet |
Klapper, Leora Sarria-Allende, Virginia Zaidi, Rida |
| author_sort |
Klapper, Leora |
| title |
A Firm-Level Analysis of Small and Medium Size Enterprise Financing in Poland |
| title_short |
A Firm-Level Analysis of Small and Medium Size Enterprise Financing in Poland |
| title_full |
A Firm-Level Analysis of Small and Medium Size Enterprise Financing in Poland |
| title_fullStr |
A Firm-Level Analysis of Small and Medium Size Enterprise Financing in Poland |
| title_full_unstemmed |
A Firm-Level Analysis of Small and Medium Size Enterprise Financing in Poland |
| title_sort |
firm-level analysis of small and medium size enterprise financing in poland |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2006/08/6969584/firm-level-analysis-small-medium-size-enterprise-financing-poland http://hdl.handle.net/10986/8352 |
| _version_ |
1764406293353725952 |