Demand and Supply Determinants of Credit Availability: Evidence from the Current Credit Crisis for European SMEs

Paola Brighi () and Valeria Venturelli ()
Additional contact information
Valeria Venturelli: University of Modena and Reggio Emilia

Chapter Chapter 4 in Financial Markets, SME Financing and Emerging Economies, 2017, pp 41-70 from Palgrave Macmillan

Abstract: Abstract The aim of this chapter is to examine the importance of demand and supply factors in determining credit availabilityCredit availability during the recent financial crisisCrisis for a different sample of small- and medium-sized enterprises (SMEs) Small and medium sized enterprises (SMEs) in some principal European countries. A first investigation suggests that during crisis time, the credit demand is mainly driven by liquidity problems. As for the determinants of credit demand, it emerges a different pattern among countries more bank than market oriented. Then, controlling for the supply of credit two types of credit rationing have been investigated. Weak rationing defines that condition for which firms asking for credit at the same interest rateInterest rates did not receive it. To be strongly bank dependent implies a greater probability to be weakly credit rationed in crisis times. Differently solid accountingAccounting data, collateral and greater size may loosen such a condition. Finally, we control for strong rationing, i.e., the condition for which a firm even if ready to accept worse interest rates is subject to rationing. Evidence suggests that relationship-lending attitude as well as larger size could weaken the rationing condition; differently collateral as well as R&D propensity may exacerbate it because of moral hazard risk and higher information asymmetries.

Keywords: Credit rationing; Information asymmetries; Z-score; SMEs; Financial crisis; G20; G21; G32; L23 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-54891-3_4

Ordering information: This item can be ordered from
http://www.palgrave.com/9783319548913

DOI: 10.1007/978-3-319-54891-3_4

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().