Credit rationing prevalence for Eurozone firms

Christos Kallandranis (), Dimitris Anastasiou and Konstantinos Drakos

Journal of Business Research, 2023, vol. 158, issue C

Abstract: Using a comprehensive survey micro dataset compiled by the European Central Bank, we shed light on the anatomy of two crucial credit market outcomes, namely discouragement and credit rationing. In particular, we assess the empirical prevalence of these two phenomena over a decade and across Eurozone countries. Prevalence was measured by projecting discouragement and rejection rates on firm size and age, traits known to be correlated with these market outcomes, also allowing for country heterogeneity. Country heterogeneity is emphatic both for discouragement and rejection rates, while discouragement and rejection rates drop monotonically with firm size. Age exerts a more complicated effect, where it takes the form of an inverse U for rejection rates, while it takes a partially monotonic drop for discouragement and the combined credit rationing metric.

Keywords: Information Asymmetry; Small Business Lending; Credit Rationing; Discouraged Borrowers; Survey Data (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:158:y:2023:i:c:s0148296322011055

DOI: 10.1016/j.jbusres.2022.113640

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