Anastasiya Shamshur

Access to Capital and Capital Structure of the Firm

The paper examines the importance of financial constraints for firm capital structure decisions in transitions economies during 1996-2006 using endogenous switching regression with unknown sample separation approach. The evidence suggests that differences in financing constraints have a significant effect on a firms capital structure. Constrained and unconstrained firms differ in capital structure determinants. Specifically, tangibility appears to be an extremely important leverage determinant for constrained firms, while macroeconomic factors (GDP and expected inflation) affect the leverage level of unconstrained firms, suggesting that those firms adjust their capital structure in response to changes in macroeconomic conditions. Moreover, financially unconstrained firms adjust their capital structures faster to the target level, which is consistent with the previous literature.

Firm Efficiency, Foreign Ownership and CEO Gender in Corrupt Environments

We study the effects of corruption on firm efficiency using a unique dataset of private firms from 14 Central and Eastern European countries from 2000 to 2013. We find that an environment characterized by a high level of corruption has an adverse effect on firm efficiency. This effect is stronger for firms with a lower propensity to behave corruptly, such as foreign-controlled firms and firms managed by female CEOs, while local firms and firms with male CEOs are not disadvantaged. We also find that an environment characterized by considerable heterogeneity in the perception of corruption is associated with an increase in firm efficiency. This effect is particularly strong for foreign-controlled firms from low corruption countries, while no effect is observed for firms managed by a female CEO.

To Bribe or Not to Bribe? Corruption Uncertainty and Corporate Practices

Using a large sample of private firms over the period from 2001 to 2013, we study the effect of corruption uncertainty on corporate investments and cash holdings. We find that a higher uncertainty about the level of corruption is associated with lower corporate investments and lower cash holdings. These results are sensitive to the ownership structure of a firm. Firms with no foreign majority ownership appear to be more sensitive to corruption-induced uncertainty than majority-controlled foreign firms. They significantly decrease their investments and cash holdings. We hypothesize that they move their cash off-balance-sheet to create cash reserves as the uncertainty of when, whom, and how much to bribe increases.

Quitting Time: Manager's Age and the Performance of Closely Held Firms

Using detailed ownership and financial information available for a large sample of owner-managed private firms in three West European countries, this paper examines the relationship between managers age and firms performance. Tracking firms over time, we find that as a manager ages, the firm experiences slower growth and a decline in investment, especially when a manager gets closer to retirement age. These results are stronger in industries more reliant on human capital, such as service and creative industries. Moreover, older managers are less likely to adopt managerial practices associated with better firm performance. Regional financial development moderates the relationship between a managers age and a firms performance. Fewer firms in more financially developed regions have older managers and in those regions the adverse effect of older managers is less pronounced. Our findings point to the importance of financial markets in facilitating the reallocation of assets from firms with older to firms with younger managers.