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The real effects of credit constraints

Author

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  • García-Posada, Miguel

Abstract

This article reviews the existing literature on financial constraints and their effect on investment. It also provides new evidence on this issue using a large sample of firms from 12 European countries for the period 2014-17. The data come from the ECB and European Commission survey on the access to finance of enterprises (SAFE), which focuses specifically on small and medium-sized enterprises (SMEs). The available evidence suggests that credit constraints play a crucial role in the investment decisions of non-financial corporations. JEL Classification: G32, E22

Suggested Citation

  • García-Posada, Miguel, 2018. "The real effects of credit constraints," Economic Bulletin Articles, European Central Bank, vol. 2.
    • Handle: RePEc:ecb:ecbart:2018:0002:1
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    File URL: https://www.ecb.europa.eu//pub/pdf/other/ebart201802_01.en.pdf
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    More about this item

    Keywords

    credit channel; financing constraints; firm financing; investment; Modigliani-Miller;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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