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Political connectedness and formal finance in transition economies

Ruziev, Kobil


Kobil Ruziev
AHOD in UG Accounting & Economics Prog Clus


Although small- and medium-sized enterprises (SMEs) represent more than 90% of all enterprises and play an important role in employment generation, they lack access to affordable formal finance. Conventionally, market failures and information imperfections are seen as major causes of this misallocation. However, the role of social and political factors in resource allocation, including access to formal finance, has recently become more widely accepted. Firm-level evidence from postcommunist economies, for example, shows that political connectedness improves access to bank credit, but is not associated with enterprise growth.

Journal Article Type Article
Publication Date Nov 7, 2017
Journal IZA World of Labor
Print ISSN 2054-9571
Peer Reviewed Peer Reviewed
Issue 398
Pages 1-11
APA6 Citation Ruziev, K. (2017). Political connectedness and formal finance in transition economies.
Keywords transition economies, formal finance, connectedness, firm-level analysis
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