Abstract
The aim of this article is to present and compare two basic sources of financing of physical investments in the corporate sector, i.e. internal finance and bank finance, and to discuss their determinants. Research methodology – The article presents the review of reference literature and applies the methodology, developed by C. Mayer, that uses the flows of funds instead of their balances, correcting the gross sources of finance by their use in order to estimate a net contribution from banks, equity capital, commercial papers, trade credits, and other instruments to the financing of the corporate sector. Outcome – The outcome of the analysis comprises the conclusions on the use of the sources of internal and bank finance for physical investments in the corporate sector in Poland and in Hungary. Originality/value – The issues discussed in the study and the comparative analysis of the two basic sources of finance in the corporate sectors in Poland and in Hungary contribute to the discussion on the financing of corporate development.
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