Firm characteristics and bank loan distribution: Who borrows in Austria?

Aggregate data highlight the significant role of bank loans in financing Austrian nonfinancial companies, with bank lending playing a more prominent role than in other euro area countries. However, until now, there has been no detailed analysis of the prevalence of bank loans at the firm level or on how borrowers differ from companies without bank loans. Utilizing the OeNB’s novel Integrated Firm-level Database (IFLD), this study provides the first analysis of the allocation of bank loans among Austrian nonfinancial companies, allowing us to examine the characteristics of bank-financed firms. Our findings reveal that approximately one-third of Austrian firms have loans from Austrian banks, with the prevalence of bank loans positively associated with firm size and tangible assets but negatively related to profitability. Furthermore, the distribution of bank loans among borrowers shows a high concentration among a small number of large firms. Despite this fact, the share of loans in total liabilities remains generally stable across size classes, ranging from 50% to 60%, except among the largest firms, which tend to rely more heavily on alternative financing sources, such as bonds. These insights lay the groundwork for understanding the reliance of Austrian firms on bank debt, offering valuable insights for monetary and macroprudential policy.