Causes and effects of financing constraints at the firm level: Some microeconometric evidence

Peter Winker

No 292, Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy"

Abstract: Asymmetric information between lender and borrower is made responsible for financing constraints at the firm level which may influence real activity. In this paper a standard model of credit rationing due to adverse selection and adverse incentive effects is used to derive hypotheses on causes of financing constraints. Firms' age and size are among the factors which should influence availability of information and hence the probability of financing constraints. Furthermore, changing business prospects might strengthen the degree of informational asymmetry between firms and banks. The main contribution of this paper is an econometric analysis of the derived hypotheses using German firm panel data. Both, hypotheses on the causes of limited access to the loan market and its effects on investment and innovative activities are tested. The estimation is based on microdata of the ifo institute for economic research, Munich. Neither the influence of asymmetric information on financing constraints nor their real effects can be rejected by the data.

Date: 1996
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (43)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/101602/1/726320862.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:kondp2:292

Access Statistics for this paper

More papers in Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy" Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().