The aim of this paper is to examine the importance of demand and supply factors in determining credit availability during the recent financial crisis for different sample of small-medium sized enterprises (SMEs) in some principal European countries. A first investigation suggests that during crisis time the credit demand is mainly driven by liquidity problems. As for the determinants of credit demand, it emerges a different pattern among countries more bank than market oriented. Then, controlling for the supply of credit two types of credit rationing have been investigated. Weak rationing defines that condition for which firms asking for credit at the same interest rate did not receive it. To be strongly bank dependent implies a greater probability to be weakly credit rationed in crises times. Differently solid accounting data, collateral and greater size may loosen such a condition. Finally, we control for strong rationing, i.e. that condition for which a firm even if ready to accept worsen interest rates, is subject to rationing. Evidence suggests that relationship lending attitude as well as larger size could weaken the rationing condition; differently collateral as well as R&D propensity may exacerbate it because of moral hazard risk and higher information asymmetries.
The Business of Banking Models, Risk and Regulation
BRIGHI, PAOLA;VENTURELLI, VALERIA
2017
Abstract
The aim of this paper is to examine the importance of demand and supply factors in determining credit availability during the recent financial crisis for different sample of small-medium sized enterprises (SMEs) in some principal European countries. A first investigation suggests that during crisis time the credit demand is mainly driven by liquidity problems. As for the determinants of credit demand, it emerges a different pattern among countries more bank than market oriented. Then, controlling for the supply of credit two types of credit rationing have been investigated. Weak rationing defines that condition for which firms asking for credit at the same interest rate did not receive it. To be strongly bank dependent implies a greater probability to be weakly credit rationed in crises times. Differently solid accounting data, collateral and greater size may loosen such a condition. Finally, we control for strong rationing, i.e. that condition for which a firm even if ready to accept worsen interest rates, is subject to rationing. Evidence suggests that relationship lending attitude as well as larger size could weaken the rationing condition; differently collateral as well as R&D propensity may exacerbate it because of moral hazard risk and higher information asymmetries.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.