Borrower discouragement prevalence for Eurozone SMEs: Investigating the impact of economic sentiment
Dimitris Anastasiou (),
Christos Kallandranis () and
Konstantinos Drakos ()
Journal of Economic Behavior & Organization, 2022, vol. 194, issue C, 161-171
We investigate whether economic sentiment exerts an impact on firms’ decision to apply for a bank loan or not and hence its impact on discouragement prevalence. Using survey data for Eurozone firms and employing a Probit Heckman selection model, we document that a positive shock in economic sentiment lowers the percentage of discouraged bank borrowers in the economy. In contrast, higher economic sentiment shock volatility leads to an increase in discouragement.
Keywords: Discouraged bank borrowers; Sentiment shock; Sentiment shock volatility; European SMEs; Heckman Selection; Uncertainty (search for similar items in EconPapers)
JEL-codes: C25 D81 D84 G10 G30 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:194:y:2022:i:c:p:161-171
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