Several studies stressed that contrary to the initial expectations, state-owned firms at the beginning of the transition, undertook painful measures to adjust to the new economic environment. This paper investigates this behaviour in a simple game theoretic framework. It is argued that the...

In this paper we investigate the capital structure of Hungarian firms using a cross-section and a panel data approach. The data set constitutes of balance sheet data and information on market structure for 1100 firms from 1992 to 1996. We find evidence of forms of financial market imperfections,...