Abstract

In this study, we focus on manufacturing firms in Eastern Europe and Central Asia and examine the impact of the 2008-2009 Global Crisis on these firms’ accounts, overdraft facilities, and loans. Our objective is to see if the crisis affected the number of manufacturing firms that have a checking/savings account, that have an overdraft facility, or that have a line of credit/loan. We also want to see whether firms changed the type of financial institution that they borrowed from (i.e. private commercial bank, state-owned bank/agency, or non-bank financial institution). Our results show that, post-crisis, a significantly lower percentage of manufacturing firms had an overdraft facility. Also, post-crisis, a significantly lower percentage of firms had a line of credit/loan. On the other hand, there was no significant change with respect to the % of firms having a checking or a savings account. Also, there was no significant change with respect to the percentage of firms borrowing from a private commercial bank, a state-owned bank/agency, or a non-bank financial institution. Overall, we conclude that, after the crisis, financial institutions in the region significantly cut their credit facilities to manufacturing firms while firms continued to transact with the same institution or a similar institution.

Keywords: overdraft, loan, line of credit, global crisis, manufacturing firms, eastern Europe, central Asia.

JEL Classification: G01, G20, G21, G22, G23, G28.

Cite as: Kaya, H. (2022). The Impact of the 2008-2009 Global Crisis on Manufacturing Firms’ Bank Accounts, Overdraft Facilities, And Loans. Financial Markets, Institutions and Risks, 6(3), 64-70. https://doi.org/10.21272/fmir.6(3).64-70.2022

This work is licensed under a Creative Commons Attribution 4.0 International License

References

1. Afzal, F., Masood, A., Khan, S. M., and Sajid, M. (2013).  Impact of financial crisis 2008 on financial institutions.  Research Journal of Finance and Accounting, 4(2), 127-135. [Link]
2. Álvarez, R. and Görg, H. (2012). Multinationals as Stabilisers? Economic Crisis, Access to Finance, and Employment Growth. Journal of Development Studies, 48(7), 847-863. [Link]
3. Alzboon, A. A., and Abu Orabi, M. M. (2013). The impact of global financial crisis (2008) on Jordanian insurance companies. Interdisciplinary Journal of Contemporary Research in Business, 5(3), 669-680. [Link]
4. Andrieș, A. M., Marcu, N., Oprea, F., and Tofan, M. (2018). Financial infrastructure and access to finance for European SMEs. Sustainability, 10(10), 3400. [Link]
5. Anton, S. G. and Bostan, I. (2017). The role of access to finance in explaining cross-national variation in entrepreneurial activity: A panel data approach. Sustainability, 9(11), 1947-1962. [Link]
6. Balucha, F., Mutengab, S., and Parsons, C. (2011).  Insurance, Systemic Risk and the Financial Crisis, The Geneva Papers, 36, 126 – 163. [Link]
7. Baştürk, F. H., and Sayın, E. (2009). The effects of 2008 crisis on Turkish insurance industry. In 12th ınternational conference on Finance and Banking, structural and regional impacts of Financial crises. [Link]
8. Bordo, M. D., Redish, A., and Rockoff, H. (2015). Why didn’t Canada have a banking crisis in 2008 (or in 1930, or 1907, or…)? The Economic History Review, 68(1), 218-243. [Link]
9. Carbo‐Valverde, S., Rodriguez‐Fernandez, F., and Udell, G. F. (2016). Trade credit, the financial crisis, and SME access to finance. Journal of Money, Credit and Banking, 48(1), 113-143. [Link]
10. Cowling, M., Liu, W., and Zhang, N. (2018). Did firm age, experience, and access to finance count? SME performance after the global financial crisis. Journal of Evolutionary Economics, 28(1), 77-100. [Link]
11. Dungey, M., and Gajurel, D. (2015). Contagion and banking crisis – International evidence for 2007–2009. Journal of Banking and Finance, 60, 271-283. [Link]
12. Ferrando, A., Popov, A., and Udell, G. F. (2017). Sovereign stress and SMEs’ access to finance: Evidence from the ECB’s SAFE survey. Journal of Banking and Finance, 81, 65-80. [Link]
13. Hüfner, F. (2010). The German banking system: Lessons from the financial crisis. OECD Working Paper ECO/WKP(2010) 44. [Link]
14. Isatayeva, G., Seitova, V., Koptayeva, G., Turlybekova, A., and Mutaliyeva, A. (2019). Financing of young knowledge-based companies after the financial crisis: The case of Kazakhstan. Entrepreneurship and Sustainability Issues, 6(3), 1226. [Link]
15. Kaya, H. D. (2016). The Impact of the 2008 Global Crisis on Access to Finance. Annals-Economy Series, 1, 6-12. [Link]
16. Kaya, H. D. (2017). The impact of the global crisis on the stability of the financial system. Journal of Applied Economic Sciences (JAES), 12(49), 698-708. [Link]
17. Kaya, H. D. (2021). The Impact of the 2008 Global Crisis on The Efficiency of The Financial System. Annals-Economy Series, 5, 86-97. [Link]
18. Kilic, O., Chelikani, S., and Coe, T. (2014).  Financial crisis and contagion: The effects of the 2008 financial crisis on the Turkish financial sector. International Journal of Applied Economics, 11(2), 19-37. [Link]
19. Lee, N., Sameen, H., and Cowling, M. (2015). Access to finance for innovative SMEs since the financial crisis. Research policy, 44(2), 370-380. [Link]
20. Leitner, S. M., and Stehrer, R. (2013). Access to finance and funding composition during the crisis: A firm-level analysis of Latin American countries. Latin american journal of economics, 50(1), 1-47. [Link]
21. Liang, Y.  (2012). Development finance: China’s banking system in light of the global financial crisis. Chinese economy, 45(1), 8-27. [Link]
22. Lysandrou, P., and Nesvetailova, A. (2015). The role of shadow banking entities in the financial crisis: A disaggregated view. Review of International Political Economy, 22(2), 257-279. [Link]
23. Maredza, A., and Ikhide, S. (2013). Measuring the impact of the global financial crisis on efficiency and productivity of the banking system in South Africa. Mediterranean Journal of Social Sciences, 4(6), 553-568. [Link]
24. Martinez-Sola, C., Garcia-Teruel, P. J., and Martinez-Solano, P. (2017). SMEs access to finance and the value of supplier financing. Spanish Journal of Finance and Accounting/Revista Espanola de Financiacion y Contabilidad, 46(4), 455-483. [Link]
25. Nikolaidou, E. and Vogiazas, S. D. (2014). Credit risk determinants for the Bulgarian banking system. International Advances in Economic Research, 20(1), 87-102. [Link]
26. Njegomir, V., Marovic, B., and Maksimovic, R. (2010).  The economic crisis and the insurance industry:  The evidence from the ex-Yugoslavia region.  Economic Annals, 55(185), 129-162. [Link]
27. Saiedi, E., and Broström, A. (2019). Financing Decisions and Outcomes of European SMEs in the Global Financial Crisis. [Link]
28. Tran, Q. T. (2021). Economic policy uncertainty and cost of debt financing: international evidence. The North American Journal of Economics and Finance, 57, 101419. [Link]
29. Vogiazas, S. D. and Nikolaidou, E. (2011). Investigating the determinants of nonperforming loans in the Romanian banking system: An empirical study with reference to the Greek crisis. Economics Research International, 1-13. [Link]