Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/266094 
Year of Publication: 
2022
Series/Report no.: 
BOFIT Discussion Papers No. 10/2022
Publisher: 
Bank of Finland, Bank of Finland Institute for Emerging Economies (BOFIT), Helsinki
Abstract: 
Firms' contractual relations with a state may give lenders a positive signal and facilitate access to debt. This paper studies the impact of public procurement contracts on ftrms' access to debt using an extensive survey of Russian manufacturing ftrms combined with accounting and procurement data. It shows that earnings from state-to-business contracts increase the short-term debt twice as much as revenue from private contracts. Long-term debt is not affected by public contracts differently compared to private contracts. The debt sensitivity to public contracts is four times larger for politically connected ftrms, although it is still positive and signiftcant for non-connected and small ftrms. The paper concludes that political connection does not entirely suppress the beneftcial access to debt that public contracts create.
Subjects: 
public procurement
political connection
leverage
short-term debt
long-term debt
capital structure
Russia
JEL: 
G18
G32
H57
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-421-5
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.