Financing Enterprises in the Czech Republic: Debt and Firm-specific Variables

This paper investigates the effects of firm specific variables on indebtedness, and thus financing decisions in the Czech Republic during the first years of transition. By estimating a Structural Equation Model with latent variables, the paper analyses the determinants of credit demand and supply in order to understand to what an extent they testify the transformation of both enterprises financing strategies and credit allocation policies and thus the emergence of a new financial discipline.