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Who needs credit and who gets credit in Eastern Europe?

Steven Ongena (), Alexander Popov (), Martin Brown () and Pinar Yesin ()

No 1421, Working Paper Series from European Central Bank

Abstract: Based on survey data covering 8,387 firms in 20 countries we compare credit demand and credit supply for firms in Eastern Europe to those for firms in selected Western European countries. We find that firms in Eastern Europe have a higher need for credit than firms in Western Europe, and that a higher share of firms is discouraged from applying for a loan. The higher rate of discouraged firms in Eastern Europe is driven more by the presence of foreign banks than by the macroeconomic environment or the lack of creditor protection. We find no evidence that foreign bank presence leads to stricter loan approval decisions. Finally, credit constraints do have a real cost in that firms which are denied credit or discouraged from applying are less likely to invest in R&D and introduce new products. JEL Classification: G21, G30, F34

Keywords: banking sector; credit constraints; transition economies (search for similar items in EconPapers)
Date: 2012-02
New Economics Papers: this item is included in nep-ban, nep-eec and nep-tra
Note: 861282
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Related works:
Journal Article: Who needs credit and who gets credit in Eastern Europe? (2011) Downloads
Working Paper: Who Needs Credit and Who Gets Credit in Eastern Europe? (2010) Downloads
Working Paper: Who Needs Credit and Who Gets Credit in Eastern Europe? (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20121421

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