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Credit Rationing and Mature French SMEs: A Disequilibrium Model

Philippe Adair and Mohamed Adaskou ()
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Mohamed Adaskou: University Ibn Zhor

World Journal of Applied Economics, 2020, vol. 6, issue 1, 55-72

Abstract: A conventional assumption that deserves testing is that small and medium-sized enterprises (SMEs) are most affected by credit crunch. In this respect, a disequilibrium model is designed to analyse the determinants of credit rationing upon a balanced panel of 2,370 mature French SMEs over the period 2002-2010. According to the estimates of simultaneous equations, the desired demand for bank credit is determined by exogenous factors from the supply-side. The credit supply-side validates best trade-off theory, whereas the credit demand-side validates best pecking order theory. The average share of rationed SMEs is seven per cent of the sample, suggesting that access to bank loans is not a major issue for mature French SMEs.

Keywords: Balanced panel; Capital structure; Credit rationing; Disequilibrium model; French SMEs (search for similar items in EconPapers)
JEL-codes: D53 G21 G23 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.22440/wjae.6.1.4

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Handle: RePEc:ana:journl:v:6:y:2020:i:1:p:55-72