This study aims to use a comparative analysis to examine the channel of deferring cash commitments, which can be seen as a strategic solution to mitigate the impact of COVID-19 on…
Abstract
Purpose
This study aims to use a comparative analysis to examine the channel of deferring cash commitments, which can be seen as a strategic solution to mitigate the impact of COVID-19 on Moldova's service sector.
Design/methodology/approach
This paper uses the Oaxaca–Blinder decomposition analysis. The World Bank's post-COVID-19 survey is used. The methodology takes into account heterogeneity among firms.
Findings
The results of the Oaxaca–Blinder decomposition analysis show that service firms use deferred cash commitments more than industrial firms, corporate governance and their pandemic-related strategies are also effective in the post-COVID Moldovan economy. The results are robust to different modeling alternatives.
Originality/value
COVID-19 can be considered a key source of uncertainty for firms, especially those operating in economies where financial frictions occasionally occur in a transition economy. Therefore, this study can shed new light on the impact of COVID-19 on financial strategies in a transition economy.
Details
Keywords
The literature on financing constraints in emerging markets is still under-researched and is often described as a “black box.” This study aims to shed light on this underexplored…
Abstract
Purpose
The literature on financing constraints in emerging markets is still under-researched and is often described as a “black box.” This study aims to shed light on this underexplored area for emerging economies. Specifically, it attempts to understand the phenomenon of financing constraints through a systematic review and bibliometric analysis.
Design/methodology/approach
A systematic literature review and bibliometric analysis are used to identify the main features of investment-cash flow sensitivity and the financing constraints hypothesis in the context of emerging markets.
Findings
Financing constraints and investment-cash flow sensitivity in emerging markets should be analyzed in light of capital market imperfections, financial liberalization and macroeconomic conditions.
Research limitations/implications
This study is expected to serve as a valuable resource for researchers interested in the financing challenges faced by firms in emerging economies.
Originality/value
To the best of the author’s knowledge, this is the first comprehensive systematic and bibliometric literature review that examines the distinct characteristics of the financing constraints hypothesis on investment decisions in emerging markets.