Sources of Investment Finance in Firms in Slovakia

Mikócziová Jana

Keywords:
investment, sources of finance, pecking order theory, information asymmetry, retained earnings

Abstract:
Based on results of the EBRD-World Bank “Business Environment and Enterprise Performance Survey” (BEEPS), the paper provides an explanation of why firms in Slovakia finance the most of their new investments with retained earnings, followed by bank debt, trade credit and external equity, as well as why small firms tend to use more retained earnings and less bank debt than medium and large firms. The financing patterns of firms in Slovakia are compared to the average financing patterns of firms in selected OECD-countries. Furthermore, measures to stimulate corporate investments and their financing are proposed.

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