Financial balance sheet approach allows emphasizing the relationship between sources of funds held by the enterprise and allocating these funds. It is the accounting records that describe the synthesis of assets and liabilities of the company at year end and the other cases provided by law, all...

The European Union is currently affected by the financial crisis that spread internationally. The member states face difficulties such as price volatility, uncertainties, liquidity issues, cases of bankruptcy, increased unemployment rate, and decreasing GDP. The present paper analyses the...

An entrepreneur faces substantial non-diversifiable business risk and liquidity constraints, both of which we refer to as frictions. We show that these frictions have significant economic effects on business start-up, capital accumulation/asset sales, portfolio allocation, consumption/saving,...

This paper estimates the causal impact of dismissal costs on capital deepening and productivity exploiting a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees, leaving firing costs unchanged for larger firms. We show that the increase in firing costs induces an...

This paper attempts to test whether financial supply-side shifts explain the low-investment climate of private firms in Germany. The core contention is that a firm's financial position contributes to its access to external finance on credit markets. Special emphasizes is put on small and...

Literature and textbooks on capital budgeting endorse Net Present Value (NPV) and generally treat accounting rates of return as not being reliable tools. This paper shows that accounting numbers can be reconciled with NPV and fruitfully employed in real-life applications. Focusing on project...

Because a borrower often faces switching costs in dealing with individual banks, the financial health of any given bank might affect the borrower's cost of funds. These costs would be particularly large for firms that have close relationships with relatively few banks. The purpose of this paper...

According to experts, investments are the most important means of development and economic growth (if not the only one). Indeed, any stable economy cannot be conceived without the support of significant investments in all fields of activity: economic, social, cultural etc. Sustainable...

A magyar nemzetgazdaság a kilencvenes években óriási átalakuláson ment keresztül. A válságot követő kilábalás és az új bár folyamatosan átalakuló gazdasági struktúrában meginduló dinamikus növekedés egyik fő tényezője a jelentős mértékű beruházás volt. Ez tette...

The Capital Asset Pricing Model (CAPM) is theoretically incomplete in its demandside focus, risk-averse investors, and internally inconsistent homogeneous beliefs; is not conclusively supported empirically; and yet it legitimizes a notion that investors can earn higher returns by bearing...