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Determinants of the choice leasing vs Bank Loan: evidence from the french sme by Kacm

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Author Info

  • Marie Christine Deghaye-Filareto

    (Centre Universitaire de la citadelle - Université du Littoral Côte d'Opale)

  • Eric Severin

    ()
    (SAMOS - Statistique Appliquée et MOdélisation Stochastique - Université Paris I - Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

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    Abstract

    The question of leasing credit as a substitute or complement of a banking loan has still not been resolved in the financial literature. As a continuation of these arguments, the objective of this article is, on the one hand, to determine the characteristics of firms using leasing credit and on the other hand, to better understand the relationship between leasing and credit rationing. Firstly, our results suggest that SME use leasing all the more the leasing so when they are young, leveraged, less solvent and that they present an small size and an important failure probability. Thus, leasing pushes back the limits of banking debt for firms that have no access to it. Secondly, our results suggest a strong and significant relationship between credit rationing and the use of leasing. In this framework the latter appears to be a last resort financing.

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    File URL: http://hal.archives-ouvertes.fr/docs/00/20/49/11/PDF/Investigacion_Operacional_Severin_2006_New-version.pdf
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    Bibliographic Info

    Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00204911.

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    Date of creation: Feb 2007
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    Publication status: Published, Investigacion Operational, 2007, 28, 2, 120-130
    Handle: RePEc:hal:cesptp:hal-00204911

    Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00204911
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    Web page: http://hal.archives-ouvertes.fr/

    Related research

    Keywords: Leasing; credit rationing; SME; Self organising maps (SOM);

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Steven A. Sharpe & Hien H. Nguyen, 1994. "Capital market imperfections and the incentive to lease," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 94-5, Board of Governors of the Federal Reserve System (U.S.).
    2. Lewis, Craig M. & Schallheim, James S., 1992. "Are Debt and Leases Substitutes?," Journal of Financial and Quantitative Analysis, Cambridge University Press, Cambridge University Press, vol. 27(04), pages 497-511, December.
    3. Beattie, Vivien & Goodacre, Alan & Thomson, Sarah, 2000. "Operating leases and the assessment of lease-debt substitutability," Journal of Banking & Finance, Elsevier, Elsevier, vol. 24(3), pages 427-470, March.
    4. DeAngelo, Harry & Masulis, Ronald W, 1980. " Leverage and Dividend Irrelevancy under Corporate and Personal Taxation," Journal of Finance, American Finance Association, American Finance Association, vol. 35(2), pages 453-64, May.
    5. V. Sivarama Krishnan & R. Charles Moyer, 1994. "Bankruptcy Costs and the Financial Leasing Decision," Financial Management, Financial Management Association, Financial Management Association, vol. 23(2), Summer.
    6. Mike Adams & Philip Hardwick, 1998. "Determinants of the leasing decision in United Kingdom listed companies," Applied Financial Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 8(5), pages 487-494.
    7. Ang, James & Peterson, Pamela P, 1984. " The Leasing Puzzle," Journal of Finance, American Finance Association, American Finance Association, vol. 39(4), pages 1055-65, September.
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