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Entrepreneurial optimism, credit availability, and cost of financing: Evidence from U.S. small businesses

Na Dai, Vladimir Ivanov and Rebel Cole ()

Journal of Corporate Finance, 2017, vol. 44, issue C, 289-307

Abstract: Using a large sample of U.S. small businesses and a new measure of optimism, we examine the role of entrepreneurial optimism in small business lending. We provide evidence that optimistic entrepreneurs are not rationed by lenders. Quite the opposite, our results suggest that they often have better credit accessibility and obtain lower cost of financing. Our results are robust to alternative measures of optimism and controls for private information between lenders and borrowers.

Keywords: Small business lending; Entrepreneurial optimism; Cost of financing (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:corfin:v:44:y:2017:i:c:p:289-307