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Individual Credit Market Experience and Perception of Aggregate Bank Lending. Evidence from a Firm Survey

Jarko Fidrmuc (), Christa Hainz and Werner Hölzl ()

No 574, WIFO Working Papers from WIFO

Abstract: We show that firms' credit market experience determines their perception of aggregate bank lending policy using panel data from the Austrian Business Survey between 2011 and 2016. Loan rejections have a strongly negative and persistent effect on perceptions. Interestingly, firms that receive a loan at worse than anticipated conditions show a similarly negative effect. Firms that do not need a loan tend to perceive lending policy as neutral and revise their perceptions less often. Our findings are in line with theories on sticky information, rational inattention and pessimism bias and suggest considering experience for the aggregation of perceptions.

Keywords: Perception of lending policy; formation of perceptions; sticky information; rational inattention; pessimism bias; behavioral macroeconomics (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur and nep-upt
Date: 2018-12-20
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