Gleb A. Bobkov, Gumay M. Magomedova Financial Constraints and Investment Activity: An Assessment Using the Kaplan-Zingales Index

DOI: 10.38050/2078-3809-2025-17-3-159-176

Abstract

The availability of long-term financing is critically important for investment development, particularly in conditions of high volatility and systematic risk. The Kaplan-Zingales Index (KZ Index) is widely used to assess corporate financial constraints, especially concerning long-term projects, including investments in research and development (R&D). However, its dynamics in the Russian economy remain insufficiently studied. The objective of this study is to evaluate the dynamics of financial constraints faced by Russian publicly traded companies in the context of their ability to finance long-term investments. The empirical analysis is based on financial reporting data and publicly available market indicators for the period 2009–2024. The prolonged decline in the median KZ Index for publicly listed non-financial companies indicates a significant easing of financial barriers for large businesses between 2009 and 2022. However, in 2022–2024, financial capacity stagnated, particularly in the oil and gas sector, which holds the largest weight in the Russian stock market. Additionally, sectoral differences in the dynamics of financial constraints were identified: specific trends were observed in the oil and gas and metallurgical industries, highlighting the need for further analysis.

Keywords: financial constraints, investment activity, financing of innovations.

JEL: G32, O16, O30, E22, L16.

For citation: Bobkov, G.A., Magomedova, G.M.  (2025) Financial Constraints and Investment Activity: An Assessment Using the Kaplan-Zingales Index. Scientific Research of Faculty of Economics. Electronic Journal, vol. 17, no. 3, pp. 165-182. DOI: 10.38050/2078-3809-2025-17-3-165-182.

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