Who Needs Credit and Who Gets Credit in Eastern Europe?

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractBased 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.

Credit Access in Latin American Enterprises

“…To check whether significant differences emerge, for each model we present the results for the whole sample, for the LAC-7, and for the remaining countries. Considering firm-level characteristics, our results confirm the existing evidence (Brown et al 2011;Cole and Dietrich 2014) that shows smaller and less productive firms are less likely to apply for credit and more likely to be financially constrained. Foreign-owned firms and exporters are also less likely to apply for bank credit than domestically oriented ones, while there is no robust evidence that they are more likely to be financially constrained.…”

Information Asymmetry and Foreign Currency Borrowing by Small Firms

“…We assume that the uncovered interest rate parity (UIP) is not fulfilled, and that there is an interest rate advantage to foreign 11 Under perfect information, all foreign currency earners would take foreign currency loans at the same interest rate independent of their revenue level. With asymmetric information about firm revenues this result also holds for reasonable assumptions on firm-level distress costs, as we show in an earlier version of our model (Brown, Ongena, Popov and Yeşin (2011)). See Goldberg and Knetter (1997), for example, on exchange rate pass-through.…”

When arm's length is too far: Relationship banking over the credit cycle

“…Financially constrained firms are seen as having a higher investment-cash flow sensitivity, an assumption that has been questioned, however (for example, Kaplan and Zingales, 1997). More recent papers focus on enterprise survey data and rely either on self-reported financing constraints (Beck, Demirgüc-Kunt and Maksimovic, 2005) or combine information on actual financing patterns with demand for external finance (Beck, Demirgüc-Kunt and Maksimovic, 2008;Brown, Ongena, Popov and Yeşin, 2011;Popov and Udell, 2012). 3 Our paper falls into the latter category.…”