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Article
BANK FINANCING AND TRADE CREDIT USE OF SLOVENIAN SMALL FIRMS: AN EMPIRICAL EXAMINATION
Alenka Slavec
ABSTRACT. The paper investigates the influence of three owner characteristics (age, educational level, and gender) and three firm characteristics (financing of long-term assets and inventories ratio, quick ratio, and operating cash flow) on use of bank loans and trade credits in small firms. This paper also investigates how bank financing and trade credit use influence the innovativeness of small firms. Based on a large sample of small firms and their owners, this study provides insights into what determines small firm financing and innovativeness. We find that banks rely more on firm characteristics, while both, firm and owner characteristics are important for trade credit use. Moreover, external financing boosts innovation activities of a small firm.
KEYWORDS: bank financing, trade credits, entrepreneur's characteristics, firm's characteristics, Slovenia.
JEL classification: L26, C30, G32.