RELATIONSHIP BETWEEN FIRMS PROPENSITY TO LEASE AND ITS CHARACTERISTICS

ABSTRACT Leasing Industry had undergone several phases of booms and busts, undercurrents of growth, periods of excessive optimism, period of regulatory action and so on. A well developed, diversified and efficient financial system can spread risk and provide a sound base for sustainable economic development. Adverse selection and moral hazard problem that arise due to asymmetry of information is often observed in banking sector. The purpose of the paper is to examine the relationship between a firm propensity to lease and several firm characteristics: tax position, financial constraints, ownership structure, growth and size.