Access to Credit as a Growth Constraint
From a sample of 75,854 Slovenian fi rms in the period 1995–2011, we examine the effects of a fi rm’s access to bank credit on its growth. The results suggest that as the external fi nancing constraint relaxes and fi rm gets access to credit, the reliance on internal funds to fi nance growth decr...
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| Format: | Article |
| Language: | English |
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University of Warsaw
2014-05-01
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| Series: | Journal of Banking and Financial Economics |
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| Online Access: | https://press.wz.uw.edu.pl/cgi/viewcontent.cgi?article=1101&context=jbfe |
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| author | Matjaž Volk Polona Trefalt |
| author_facet | Matjaž Volk Polona Trefalt |
| author_sort | Matjaž Volk |
| collection | DOAJ |
| description | From a sample of 75,854 Slovenian fi rms in the period 1995–2011, we examine the effects of
a fi rm’s access to bank credit on its growth. The results suggest that as the external fi nancing
constraint relaxes and fi rm gets access to credit, the reliance on internal funds to fi nance growth
decreases. By exploring the role of available collateral in gaining access to bank credit, we find
that collateral only helps larger fi rms to obtain credit more easily. On the other hand, collateral
does not reduce micro fi rms’ dependence on internal funds to fi nance growth, which suggests that
even if they have collateral, banks are still unprepared to finance them, possibly due to the level of
risk. It could also be that in approving credit to micro firms, other factors such as liquidity or cash
fl ow are more highly considered by banks than the value of collateral. |
| format | Article |
| id | doaj-art-28cd59c8873a47f48fc5dc49c8e9e84f |
| institution | Kabale University |
| issn | 2353-6845 |
| language | English |
| publishDate | 2014-05-01 |
| publisher | University of Warsaw |
| record_format | Article |
| series | Journal of Banking and Financial Economics |
| spelling | doaj-art-28cd59c8873a47f48fc5dc49c8e9e84f2025-01-02T23:16:32ZengUniversity of WarsawJournal of Banking and Financial Economics2353-68452014-05-0120141(1)293910.7172/2353-6845.jbfe.2014.1.2Access to Credit as a Growth ConstraintMatjaž Volk0Polona Trefalt1Bank of SloveniaBank of SloveniaFrom a sample of 75,854 Slovenian fi rms in the period 1995–2011, we examine the effects of a fi rm’s access to bank credit on its growth. The results suggest that as the external fi nancing constraint relaxes and fi rm gets access to credit, the reliance on internal funds to fi nance growth decreases. By exploring the role of available collateral in gaining access to bank credit, we find that collateral only helps larger fi rms to obtain credit more easily. On the other hand, collateral does not reduce micro fi rms’ dependence on internal funds to fi nance growth, which suggests that even if they have collateral, banks are still unprepared to finance them, possibly due to the level of risk. It could also be that in approving credit to micro firms, other factors such as liquidity or cash fl ow are more highly considered by banks than the value of collateral.https://press.wz.uw.edu.pl/cgi/viewcontent.cgi?article=1101&context=jbfeaccess to creditcollateraldynamic panel |
| spellingShingle | Matjaž Volk Polona Trefalt Access to Credit as a Growth Constraint Journal of Banking and Financial Economics access to credit collateral dynamic panel |
| title | Access to Credit as a Growth Constraint |
| title_full | Access to Credit as a Growth Constraint |
| title_fullStr | Access to Credit as a Growth Constraint |
| title_full_unstemmed | Access to Credit as a Growth Constraint |
| title_short | Access to Credit as a Growth Constraint |
| title_sort | access to credit as a growth constraint |
| topic | access to credit collateral dynamic panel |
| url | https://press.wz.uw.edu.pl/cgi/viewcontent.cgi?article=1101&context=jbfe |
| work_keys_str_mv | AT matjazvolk accesstocreditasagrowthconstraint AT polonatrefalt accesstocreditasagrowthconstraint |