Perceived Credit Constraints in the European Union

26 Pages Posted: 13 Jan 2010

See all articles by Erik J.F. Canton

Erik J.F. Canton

CPB Netherlands Bureau of Economic Policy Analysis

Isabel Grilo

Catholic University of Louvain

Josefa Monteagudo

Autonomous University of Barcelona - Department of Economics and Economic History

Peter van der Zwan

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Date Written: October 29, 2012

Abstract

The promotion and support of small and medium-sized enterprises (SMEs) forms an essential ingredient of the policies designed to help improve Europe’s economic performance. A key issue is whether SMEs face difficulty obtaining bank loans. Using pre-crisis survey data from 2005 and 2006 for nearly 3,500 SMEs (firms with fewer than 250 employees) in the European Union (EU), we investigate the determinants of perceived bank loan accessibility at the firm level and at the country level. Based on hierarchical (multi-level) binomial logit regressions, our findings show that the youngest and smallest SMEs have the worst perceptions regarding access to bank loans. The SMEs in nations with concentrated banking sectors are more positive about loan accessibility. In addition, a high fraction of foreign-owned banks is associated with improved perceptions regarding loan accessibility in the EU 15 but not in the EU 10.

Keywords: SMEs, concentration index, credit constraints, bank loans, money supply, multi-level

JEL Classification: E51, G15, G21, E44

Suggested Citation

Canton, E.J.F. and Grilo, Isabel and Monteagudo Pujalte, Josefa and van der Zwan, Peter, Perceived Credit Constraints in the European Union (October 29, 2012). ERIM Report Series Reference No. ERS-2010-001-ORG, Available at SSRN: https://ssrn.com/abstract=1535184

E.J.F. Canton (Contact Author)

CPB Netherlands Bureau of Economic Policy Analysis ( email )

2508 GM The Hague
Netherlands

Isabel Grilo

Catholic University of Louvain ( email )

Place Montesquieu, 3
B-1348 Louvain-la-Neuve, 1348
Belgium
010 47 43 60 (Phone)

Josefa Monteagudo Pujalte

Autonomous University of Barcelona - Department of Economics and Economic History ( email )

Edifici B - Campus Bellaterra
Barcelona, 08193
Spain

Peter Van der Zwan

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

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