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<p>The aim of this paper is to ascertain corporate investment reaction in bank-dependent companies in times of crisis. Our investigation covers the differences in corporate investment reaction due to the global financial crisis (GFC) of 2007–2009 and the COVID-19 crisis of 2020–2021. We utilized panel data of companies present on the Warsaw Stock Exchange during the GFC and COVID-19 crisis—932 firm-year observations. We found a negative relationship between bank dependence (static ratio) and corporate investment, but a statistical significance was found only for the GFC period. We also found a positive relationship between bank dependence (dynamic ratio) and corporate investment, but statistical significance was found only for the GFC period. Additionally, we found that during the COVID-19 crisis, the level of corporate investment was at its lowest level, but the biggest drop was noticeable during the GFC when compared to the pre-GFC period. Our article contributes to the existing research by being part of the research on corporate investment and capital structure. It consists of the research on one of the determinants of the corporate investment and capital structure decisions—macroeconomic turbulence manifested in economic crises.</p>
</abstract>

The aim of this paper is to ascertain corporate investment reaction in bank-dependent companies in times of crisis. Our investigation covers the differences in corporate investment reaction due to the global financial crisis (GFC) of 2007–2009 and the COVID-19 crisis of 2020–2021. We utilized panel data of companies present on the Warsaw Stock Exchange during the GFC and COVID-19 crisis—932 firm-year observations. We found a negative relationship between bank dependence (static ratio) and corporate investment, but a statistical significance was found only for the GFC period. We also found a positive relationship between bank dependence (dynamic ratio) and corporate investment, but statistical significance was found only for the GFC period. Additionally, we found that during the COVID-19 crisis, the level of corporate investment was at its lowest level, but the biggest drop was noticeable during the GFC when compared to the pre-GFC period. Our article contributes to the existing research by being part of the research on corporate investment and capital structure. It consists of the research on one of the determinants of the corporate investment and capital structure decisions—macroeconomic turbulence manifested in economic crises.

Corporate Investment in Bank-Dependent Companies in Crisis Time

Central European Economic Journal

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Corporate Investment in Bank-Dependent Companies in Crisis Time"}

The aim of this paper is to ascertain corporate investment reaction in bank-dependent companies in times of crisis. Our investigation covers the differences in...

Corporate Investment in Bank-Dependent Companies in Crisis Time

Published Online: Jan 20, 2023

Page range: 1 - 22

DOI: https://doi.org/10.2478/ceej-2023-0001

Keywords
corporate investment, corporate debt, crisis time

© 2023 Elżbieta Bukalska et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Corporate Investment in Bank-Dependent Companies in Crisis Time

Published Online: Jan 20, 2023

Page range: 1 - 22

DOI: https://doi.org/10.2478/ceej-2023-0001

Keywordscorporate investment, corporate debt, crisis time

© 2023 Elżbieta Bukalska et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
corporate investment, corporate debt, crisis time