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The determinants of credit rationing of SMEs in France: A disequilibrium model upon a balanced panel

Les déterminants du rationnement du crédit des PME en France: un modèle de déséquilibre sur un panel cylindré (2002-2010)

Philippe Adair and Mohamed Adaskou

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Abstract: Abstract Credit rationing results from the existence of asymmetric information, both ex ante and ex post the signing of the loan agreement. It refers to an equilibrium wherein which banks grant credit to some borrowers whereas they crowd out others that would pay nevertheless a higher interest rate. A conventional assumption is that Small and medium enterprises (SMEs) are most affected by credit crunch. We design a disequilibrium model to analyse the determinants of credit rationing upon a balanced panel of 2,370 French SMEs over the period 2002-2010. According to the estimates of simultaneous equations, the desired demand for bank credit is determined by exogenous factors from the supply-side such as interest rate and the guarantees required by banks. Banks decide to grant credit based on the means to ensure the payback of loans. The average share of rationed SMEs, whether partially or totally, is 23.46 per cent of the sample. This result suggests that access to bank loans is not a major issue for French SMEs, which have been operating for a decade. Keywords: balanced panel; credit rationing; disequilibrium model; France; SME, JEL: G21, G23

Keywords: balanced panel; credit rationing; disequilibrium model; SMEs; France (search for similar items in EconPapers)
Date: 2016-10
New Economics Papers: this item is included in nep-ent
Note: View the original document on HAL open archive server: https://hal-upec-upem.archives-ouvertes.fr/hal-01667299
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Published in 2ème Colloque International sur la Défaillance d’Entreprises (CIDE), Oct 2016, Nanterre, France

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