Impact of Financing Strategy on Financial Constraints: Evidence from Manufacturing and Service Enterprises
Impact of Financing Strategy on Financial Constraints: Evidence from Manufacturing and Service Enterprises

Summary/Abstract: The aim of the study was to examine the relationship between financing strategies and financial constraints in Polish conditions. Ultimately, the entire sample was divided into industrial and service companies. This division allows us to check what relationships exist in a specific industry. The research panel sample consists of 150 companies listed on the Warsaw Stock Exchange in Poland. The study covered the years 2008 - 2018. We use a number of indicators that originate from the literature on financial strategies and financial constraints. Our results show that there is a link between financing strategies and financial constraints for Polish companies. We prove that there are statistically significant differences between sectors in terms of financial constraints. We find a relationship between the level of the NWC and the financing strategy and financial constraints, but only for manufacturing companies. Our results show that the directions of correlation indicate that processing companies with financial constraints use an aggressive financing strategy. This study contributes to the existing literature dealing with the impact of funding strategies on financial constraints. We would like to point out that there is little research on this subject. Our study gives significant results, because we do not find any study on this subject for Polish conditions.

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