The development of capital market and its impact on providing alternative sources of business financing: Empirical analysis

Govori, Fadil (2014): The development of capital market and its impact on providing alternative sources of business financing: Empirical analysis.

Abstract

We survey 500 business firms about the initial capital and its adequacy for business startup, how much the banking system meets the needs of business firms for loans, need for new sources of financing, if businesses possess sufficient information regarding the capital market, whether the lack of capital market impacts the acces to finance, why financing with debt is not used by domestic businesses, and whether the issue of bonds will be used to finance businesses in the near future. The purpose of the study is to analyze the impact produced from the development of the capital market on providing alternative sources of business financing. Study hypotheses derive from the current reality and include casual links between study variables. Study covers the analysis of key variables determining the factors which bring out the impact produced from the development of the capital market on providing alternative sources of business financing. The research will involve both quantitative and qualitative approach. The hi-square test analysis has reported that for the observed statistics of the hi-square test, the null hypothesis - development of capital market will better meet the needs of businesses for alternative sources of funding, is proven, hence the hypothesis is valid, and the alternative hypothesis - although the capital market would develop, it will not affect the creation of new alternative sources of funding, is rejected.

• Item Type: MPRA Paper
• Language: English
• Keywords: Capital adequacy; Sources of financing; Bank loans; Capital market; Debt financing; Survey
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G20 - General; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General; G - Financial Economics > G3 - Corporate Finance and Governance > G31 - Capital Budgeting ; Fixed Investment and Inventory Studies ; Capacity; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill

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