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Abstract:

This paper is based on a study conducted in the fall of 2011 on the Belgian leasing market and involves a sample of 127,591 firms over the time period 2007-2010. The quantitative results are supported by qualitative information gained from 72 interviews/surveys with corporate financial managers. The data show that growth firms that need to invest heavily in tangible fixed assets, that are more heavily indebted and that are more profitable are more prone to use leasing. This profile is in line with the qualitative findings that indicate that, as for indebted growth firms flexibility and improved opportunities for cash planning is very important, exactly these properties of leasing products are valued most by firms that use it. By contrast, for firms that grow less and hence have less need for external finance, price becomes a more important consideration1.