Demand for debt and equity before and after the financial crisis

MPRA Paper from University Library of Munich, Germany

Abstract: Supply and demand responses to financial crises result in fluctuations in credit flow to the private sector. Policy makers concerned with the sustainability and growth of viable firms should disaggregate these responses. Utilising firm level data, this study investigates characteristics of firms applying for external finance before and after the financial crisis, along with characteristics of successful applicants. Notwithstanding changes in credit conditions, salient features of external financing demand endure across the period, including ownership, asset structure, age and size. Failure to secure debt in an earlier period does not deter firm owners from applying for loans in a subsequent period. Evidence suggests that the most financially distressed firms are suffering the greatest consequences of the credit crunch.

Keywords: SME Finance; Discouraged borrowers; Credit crunch; Procyclical lending; Sectoral differences. (search for similar items in EconPapers)
JEL-codes: E22 E3 E32 E4 E41 E51 E65 G21 G32 (search for similar items in EconPapers)
Date: 2012-09-25, Revised 2013-02-05
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Citations: View citations in EconPapers (7)

Published in Research in International Business and Finance 2013.28(2013): pp. 105-117

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Related works:
Journal Article: Demand for debt and equity before and after the financial crisis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:62257

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