Demand for debt and equity before and after the financial crisis

Ciarán Mac an Bhaird

Research in International Business and Finance, 2013, vol. 28, issue C, 105-117

Abstract: Supply and demand responses to financial crises result in fluctuations in credit flow to the private sector. Policy makers concerned with the sustainability and growth of viable firms should disaggregate these responses. Utilising firm level data, this study investigates characteristics of firms applying for external finance before and after the financial crisis, along with characteristics of successful applicants. Notwithstanding changes in credit conditions, salient features of external financing demand endure across the period, including ownership, asset structure, age and size. Failure to secure debt in an earlier period does not deter firm owners from applying for loans in a subsequent period. Evidence suggests that the most financially distressed firms are suffering the greatest consequences of the credit crunch.

Keywords: SME finance; Discouraged borrowers; Credit crunch; Procyclical lending; Sectoral differences (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:28:y:2013:i:c:p:105-117

DOI: 10.1016/j.ribaf.2012.10.001

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