French manufacturing firms and the capital gap since1985 - a credit rationing approach

SylvieCieply, Bernard Paranque and .
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SylvieCieply: IUP Banque Caen

Finance from University Library of Munich, Germany

Abstract: s: An earlier study (Cieply, Paranque, 1996) revealed the existence of a size effect in the determination of the financial structures of French firms over the period 1990-1993. However, this effect only appeared clearly above the 2000 employee threshold and was not sufficient to identify the dominant factors explaining the financial structures observed. We therefore turned to a model that included the determinants of the demand for and supply of financial debt. The main findings of this research are: the importance of credit rationing by demand over the period as a whole and across the population of firms; the absence of any effect of substitution of debt to suppliers for debt to financial institutions, perhaps due to a lack of information about the customers of firms subject to credit rationing by supply; the high frequency of firms with financial links subject to credit rationing by supply, which doubtless corresponds to specific methods for managing cash balances and the production cycle; the fact that listed firms are more often in equilibrium than other firms. The hypothesis of a small business capital gap is borne out only for the smallest businesses, especially as regards long-term debt. However, this finding is not entirely clear-cut. Lastly, the prevalence of each configuration seems to depend more on the movement of interest rates than on their spread.

Keywords: credit rationning; liste; unlisted; size; sme's; capital gap (search for similar items in EconPapers)
JEL-codes: E5 G (search for similar items in EconPapers)
Pages: 38 pages
Date: 1997-08-27, Revised 2000-10-29
Note: pdf, 38 pages, withe charts and tables.
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