Which Firms Have a Soft Loan ? Managers' Believes in a Cross-Country Survey in Transition Economies
AbstractThis paper is an empirical work grounded in the soft budget constraint literature. A loan is soft when a bank cannot commit to hold an enterprise to a fixed initial budget and/or the timing of repayment. Using data collected by the EBRD (BEEPS 2002) in 26 transition economies, we analyze the determinants of managers' expectations to have a soft loan. We show that managers' believes integrate some of the decision criteria of the banks: managers' expectations to have soft loans are lower when the initial financing requires collateral, higher for big firms and higher when firms had recently experienced financial distress. ...French Abstract : Ce papier empirique s'inscrit dans la littérature sur la contrainte budgétaire lâche. Un prêt est lâche quand la banque ne peut pas s'engager, de manière crédible, à maintenir le prêt à un certain montant et/ou à certaines échéances. A l'aide de données collectées par la BERD (BEEPS 2002) dans 26 pays en transition, on analyse les croyances des managers d'obtenir un prêt lâche. Les managers intègrent dans leurs croyances les critères de décision des banques. Les anticipations d'avoir un prêt lâche sont plus faibles quand le financement engage un collatéral. Les grandes firmes et les firmes qui ont connu des difficultés financières ont, elles, des anticipations plus élevées.
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Bibliographic InfoPaper provided by UMR MOISA : Marchés, Organisations, Institutions et Stratégies d'Acteurs : CIHEAM-IAMM, CIRAD, INRA, Montpellier SupAgro, IRD - Montpellier, France in its series Working Papers MOISA with number 200603.
Date of creation: 2006
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SOFT BUDGET CONSTRAINT; EASTERN EUROPE;
Find related papers by JEL classification:
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
- G3 - Financial Economics - - Corporate Finance and Governance
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-03 (All new papers)
- NEP-CFN-2006-06-03 (Corporate Finance)
- NEP-FIN-2006-06-03 (Finance)
- NEP-FMK-2006-06-03 (Financial Markets)
- NEP-TRA-2006-06-03 (Transition Economics)
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