State Dependence in Access to Credit

Claudia Pigini, Andrea Presbitero and Alberto Zazzaro ()

No 102, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: We present a simple theory and an empirical test for state dependence in firm access to credit. We estimate a first-order Markov model of credit restriction with sample selection that makes it possible to estimate state dependence in the presence of feedback effects and observed and unobserved heterogeneity. The results, based on a representative sample of Italian firms, show that state dependence in access to credit is a statistical and economically significant: experiencing a credit restriction in the past has a negative impact on the outcome of the current loan application and the decision to apply for a new loan.

Keywords: Credit constraints; Discouraged borrowers; First-order Markov model; State dependence (search for similar items in EconPapers)
JEL-codes: C33 C35 F33 F34 F35 O11 (search for similar items in EconPapers)
Pages: 46
Date: 2014-12
New Economics Papers: this item is included in nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: State dependence in access to credit (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wmofir:102

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