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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 Panthéon-Sorbonne - Paris I, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
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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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00204911_v1.

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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_v1

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

References listed on IDEAS
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  1. DeAngelo, Harry & Masulis, Ronald W, 1980. " Leverage and Dividend Irrelevancy under Corporate and Personal Taxation," Journal of Finance, American Finance Association, vol. 35(2), pages 453-64, May. [Downloadable!] (restricted)
  2. Adedeji, Abimbola & Stapleton, Richard C, 1996. "Leases, Debt and Taxable Capacity," Applied Financial Economics, Taylor and Francis Journals, vol. 6(1), pages 71-83, February. [Downloadable!] (restricted)
  3. Sharpe, Steven A. & Nguyen, Hien H., 1995. "Capital market imperfections and the incentive to lease," Journal of Financial Economics, Elsevier, vol. 39(2-3), pages 271-294. [Downloadable!] (restricted)
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  4. Adams, Mike & Hardwick, Philip, 1998. "Determinants of the Leasing Decision in United Kingdom Listed Companies," Applied Financial Economics, Taylor and Francis Journals, vol. 8(5), pages 487-94, October. [Downloadable!] (restricted)
  5. Beattie, Vivien & Goodacre, Alan & Thomson, Sarah, 2000. "Operating leases and the assessment of lease-debt substitutability," Journal of Banking & Finance, Elsevier, vol. 24(3), pages 427-470, March. [Downloadable!] (restricted)
  6. V. Sivarama Krishnan & R. Charles Moyer, 1994. "Bankruptcy Costs and the Financial Leasing Decision," Financial Management, Financial Management Association, vol. 23(2), Summer.
  7. Ang, James & Peterson, Pamela P, 1984. " The Leasing Puzzle," Journal of Finance, American Finance Association, vol. 39(4), pages 1055-65, September. [Downloadable!] (restricted)
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