Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie (Aug 2022)
A STUDY OF THE IMPACT OF THE 2008-2009 GLOBAL CRISIS IN EASTERN EUROPE AND CENTRAL ASIA: RETAILERS’ AND CORE INDUSTRY FIRMS’ FIXED ASSET PURCHASES
Abstract
This paper investigates the impact of the 2008-2009 Crisis on retailers and core industry firms in Eastern Europe and Central Asia. Utilizing the World Bank’s BEEPS IV (for pre-Crisis) and V (for post-Crisis) survey data, we look at the timing of payment of fixed assets purchased as well as how these firms paid for their purchases of fixed assets, i.e., financing by internal funds, financing by owner’s contribution, and financing by supplier credit. We find that the percentage of customers of retailers and core industry firms paying after delivery had declined post-Crisis. Such finding suggests that these firms had tightened up their credit policies which resulted in more customers paying before deliveries. We also find that the use of internal funds by both retailers and core industry firms significantly increased post-Crisis. As such, we also find that the use of owner’s distribution (new shares) and supplier credit significantly decreased post-Crisis, for both retailers and core industry firms. These findings are consistent with prior studies which suggest more stringent credit requirements following a crisis. This results in a change in firms’ capital structure.
