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Primary Sources of Corporate Investment in Hungary

Primary Sources of Corporate Investment in Hungary AbstractThis research aims to reveal how Hungarian companies have financed investments over the last two decades. Which financing strategy characterized them: was internal capital accumulation or external resources, such as bank loans or foreign capital the primary source of corporate investments? The study gives an overview of the conditions typical in the Hungarian financing and capital market over the last 25 years through an empirical analysis. Using a linear regression model, the paper examines the main investments sources among the top 5000 Hungarian firms according to revenues between 1996 and 2014. The model proved that the effect of loans in financing investments was significant and positive in all examined firms, independently from their ownership in the whole period. The rate of indebtedness of foreign companies was mainly attributable to local bank credits and not loans granted by mother companies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Scientific Annals of Economics and Business de Gruyter

Primary Sources of Corporate Investment in Hungary

Scientific Annals of Economics and Business , Volume 64 (2): 18 – Jun 27, 2017

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Publisher
de Gruyter
Copyright
© 2017
eISSN
2501-3165
DOI
10.1515/saeb-2017-0014
Publisher site
See Article on Publisher Site

Abstract

AbstractThis research aims to reveal how Hungarian companies have financed investments over the last two decades. Which financing strategy characterized them: was internal capital accumulation or external resources, such as bank loans or foreign capital the primary source of corporate investments? The study gives an overview of the conditions typical in the Hungarian financing and capital market over the last 25 years through an empirical analysis. Using a linear regression model, the paper examines the main investments sources among the top 5000 Hungarian firms according to revenues between 1996 and 2014. The model proved that the effect of loans in financing investments was significant and positive in all examined firms, independently from their ownership in the whole period. The rate of indebtedness of foreign companies was mainly attributable to local bank credits and not loans granted by mother companies.

Journal

Scientific Annals of Economics and Businessde Gruyter

Published: Jun 27, 2017

References