Title:

Determinants and speed of adjustment of financial liquidity: Evidence from Central and Eastern Europe

Group publication title:

Argumenta Oeconomica

Creator:

Czerwonka, Leszek ; Jaworski, Jacek

Subject and Keywords:

working capital management ; liquidity determinants ; target level of liquidity ; speed of liquidity adjustment ; Central and Eastern Europe

Description:

Argumenta Oeconomica, 2024, Nr 2 (53), s. 200-216

Abstrakt:

The article aims at (i) identifying the financial liquidity determinants at firm, industry and country level, (ii) examining whether firms follow the target liquidity level, and (iii) determining the average speed of adjustment to this level. Statistical analysis was used in an empirical study based on financial data of 13,513 firms operating in seven countries from Central and Eastern Europe in the research period 2012-2020. The study confirmed company-specific liquidity determinants (company size, growth, tangibility, leverage and cash flow). The average industry liquidity was found to be an industry-specific factor (positive relationship). The positive impact of unemployment and access to credit was detected at country level. The study also showed that country-specific determinants had twice as broad an influence on liquidity as industry-specific factors. It also provided evidence that companies tend to achieve the target liquidity level. The speed of adjustment was 88%.

Publisher:

Publishing House of Wroclaw University of Economics and Business

Place of publication:

Wroclaw

Date:

2024

Resource Type:

artykuł

Resource Identifier:

doi:10.15611/aoe.2024.2.14

Language:

eng

Relation:

Argumenta Oeconomica, 2024, Nr 2 (53)

Rights:

Pewne prawa zastrzeżone na rzecz Autorów i Wydawcy

Access Rights:

Dla wszystkich zgodnie z licencją

License:

CC BY-SA 4.0

Location:

Uniwersytet Ekonomiczny we Wrocławiu