Entrepreneurial Finance in France: The Persistent Role of Banks
AbstractWe study financial constraints new firms suffer from in France during the mid-nineties. Three types of constraints are distinguished: the classic and well-known weak and strong credit rationing and the new concept of self-rationing bound to the theory of discouraged borrowers. We look for these constraints on a sample of new firms which survived at least 3 years during the mid-nineties. Empirical findings show credit constraints as a whole concern 41.96% of the sample and a very low proportion of new firms suffer from credit rationing â€œÃ la Stiglitz-Weissâ€. Weak credit rationing and self-rationing, caused by discouragement, are more widespread among French new firms. We highlight moreover the role of banks during the post-start up stage even if firms have suffered from credit rationing at the beginning of their life. Results not only suggest the absence of firmsâ€™ path of exclusion on the credit market but the rent expropriation by banks.
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Bibliographic InfoPaper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam. in its series Research Paper with number ERS-2009-056-ORG.
Date of creation: 01 Dec 2009
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banks; credit rationing; discouragement; self-rationing;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-10 (All new papers)
- NEP-BAN-2010-01-10 (Banking)
- NEP-CFN-2010-01-10 (Corporate Finance)
- NEP-ENT-2010-01-10 (Entrepreneurship)
- NEP-SBM-2010-01-10 (Small Business Management)
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- de Meza, David & Webb, David C, 1987. "Too Much Investment: A Problem of Asymmetric Information," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 281-92, May.
- Ingrid Groessl & Nadine Levratto, 2012. "International Similarities of Bank Lending Practices and Varieties of Insolvency Laws: a Comparative Analysis of France and Germany," Macroeconomics and Finance Series 201203, Hamburg University, Department Wirtschaft und Politik.
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