Determinants of financing constraints

Abstract Using a recursive bivariate probit model and survey data covering the period 2014–2018, present paper aims to assess which factors in financial market (supply side) have higher impact on firms’ likelihood be financially constrained. The results show that after controlling for potential endogenous bias due unobservable firm characteristics, being an innovative increases probability of constrained between 21 32%. nature innovation strategy also seems influence severity financing constraints. For firms, main limit future growth ambitions are lack collateral, bureaucracy, too high price. Findings indicate measures facilitate equity investments making existing public easier most important while tax incentives only play minor role.