Year: 2021
Type: article
Abstract: This paper investigates firms' access to bank credit in eleven euro area countries over the periods 2014-2019. Exploiting firm-level longitudinal data, we analyse loan demand and credit rationing probabilities, accounting for sample selection, unobserved heterogeneity and state dependence. Empirical results show that small and informationally opaque businesses, with deteriorated public support and credit history, face greater difficulties in obtaining bank loans. Furthermore, we provide evidence of a significant degree of state dependence in access to credit. In particular, firms that have already experienced credit restrictions are more likely to face further constraints, while enterprises that applied for bank financing in the past seem to have easier access to credit. Focusing on the subset of firms actually needing additional bank financing, we also find that past credit restrictions significantly reduce their current demand, providing evidence of a significant discouragement effect. Supplementary Information: The online version contains supplementary material available at 10.1007/s11187-021-00545-x.
Source: Small Business Economics
Authors: David Aristei, Gabriele Angori
Institutions: University of Perugia, University of Ferrara
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,780
OpenAlex ID: W3209320546