Book Details

Financial Market Imperfections and Corporate Decisions

: 2006

: 978-3-7908-1671-6


The book presents the results of an empirical investigation of the behaviour of Hungarian firms during the transition process focusing in particular on the role of financial market imperfections for corporate capital structure and investment decisions. The results suggest that financial market reforms have succeeded, albeit partially, in hardening firms's budget constraints and improving the efficiency of the credit allocation process. In particular, following the introduction of the banking sector reform and of the new bankruptcy law, budget constraints became more binding for small private firms, while informational costs became less relevant for foreign-owned firms.

: Business and Economics, Banking, Financial Market Imperfections, Financial Markets, Hungary, Investment, Transition Economics, Transition Process