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| Author: | Bignebat, C. Gouret, F. |
| Title: | Determinants and consequences of soft budget constraints: An empirical analysis using enterprise-level data in transition countries |
| Journal: | Economics of transition
2008 : VOL. 16:3, p. 503535 |
| Index terms: | eastern europe budgetary control |
| Freeterms: | soft budget constraint |
| Language: | eng |
| Abstract: | This article presents an empirical work based on the soft budget constraint (SBC) literature. When the bank cannot commit the enterprise to hold to a fixed initial budget or the timing of repayment, the loan is called soft. The determinants of managers' expectations (here as: exps.) of having a soft loan are analyzed. The result indicates that managers' exps. are lower when the initial financing requires collateral. Expectations are higher for larger firms when firms had recently experienced financial difficulties. Evidence is provided that managers' exps. influence their price responsiveness. |
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