IDEAS home Printed from https://ideas.repec.org/a/ssi/jouesi/v5y2018i3p565-580.html

The impact of credit availability on small and medium companies

Author

Listed:
  • Bogdan Włodarczyk

    (University of Warmia and Mazury in Olsztyn, Poland)

  • Marek Szturo

    (University of Warmia and Mazury in Olsztyn, Poland)

  • George H. Ionescu

    (Romanian-American University, Romania)

  • Daniela Firoiu

    (Romanian-American University, Romania)

  • Ramona Pirvu

    (University of Craiova, Romania)

  • Roxana Badircea

    (University of Craiova, Romania)

Abstract

Existing research proves that companies' access to bank loans or other external sources of financing for business development is one of the defining factors of the survival and development of a company on the market. This is all the more important in the case of small and medium-sized companies, knowing that they face a series of difficulties in obtaining financing from banking institutions, especially due to an insufficient amount of information needed provided to banks and needed by them to analyze the opportunity for a loan. However, as the economic and financial conditions of a company are better, the more information is available to banks and the credit availability is higher. By this research we analyse the factors affecting the credit availability and their influence on development of Polish small and medium companies, such as company’s size and age, financial results or the length of relationship with the banking institution, as well as the features characterizing the banking sector. The results demonstrate that in Poland, similarly to other European countries, small and medium companies have a more limited access to credit availability than large companies. Moreover, a significant dependence of bank credit availability from the size of the company, liquidity, profitability and the situation in the banking sector was demonstrated.

Suggested Citation

  • Bogdan Włodarczyk & Marek Szturo & George H. Ionescu & Daniela Firoiu & Ramona Pirvu & Roxana Badircea, 2018. "The impact of credit availability on small and medium companies," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 5(3), pages 565-580, March.
    • Handle: RePEc:ssi:jouesi:v:5:y:2018:i:3:p:565-580
    DOI: 10.9770/jesi.2018.5.3(12)
    as

    Download full text from publisher

    File URL: https://jssidoi.org/jesi/uploads/articles/19/Wlodarczyk_The_impact_of_credit_availability_on_small_and_medium_companies.pdf
    Download Restriction: no
    File URL: https://jssidoi.org/jesi/article/168
    Download Restriction: no
    File URL: https://libkey.io/10.9770/jesi.2018.5.3(12)?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Enrica Detragiache & Paolo Garella & Luigi Guiso, 2000. "Multiple versus Single Banking Relationships: Theory and Evidence," Journal of Finance, American Finance Association, vol. 55(3), pages 1133-1161, June.
    2. Michał Barnard Pietrzak & Adam P. Balcerzak & Artur Gajdos & Łukasz Arendt, 2017. "Entrepreneurial environment at regional level: the case of Polish path towards sustainable socio-economic development," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 5(2), pages 190-203, December.
    3. Arnoud W. A. Boot & Anjan V. Thakor, 2000. "Can Relationship Banking Survive Competition?," Journal of Finance, American Finance Association, vol. 55(2), pages 679-713, April.
    4. Brkic, Sabina & Hodzic, Migdat & Dzanic, Enis, 2017. "Fuzzy Logic Model of Soft Data Analysis for Corporate Client Credit Risk Assessment in Commercial Banking," MPRA Paper 83028, University Library of Munich, Germany, revised Nov 2017.
    5. Cole, Rebel, 2010. "Bank credit, trade credit or no credit: Evidence from the Surveys of Small Business Finances," MPRA Paper 24689, University Library of Munich, Germany, revised 15 Mar 2010.
    6. Martin Brown & Steven Ongena & Alexander Popov & Pinar Yeşin, 2011. "Who needs credit and who gets credit in Eastern Europe? [Interaction terms in logit and probit models]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 26(65), pages 93-130.
    7. repec:bla:ecpoli:v:26:y:2011:i:01:p:93-130 is not listed on IDEAS
    8. Cahn, Christophe & Duquerroy, Anne & Mullins, William, 2017. "Unconventional Monetary Policy and Bank Lending Relationships," SocArXiv vgk25, Center for Open Science.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gheorghe Hurduzeu & Radu Lucian Pânzaru & Dragoș Mihai Medelete & Andi Ciobanu & Constanța Enea, 2022. "The Development of Sustainable Agriculture in EU Countries and the Potential Achievement of Sustainable Development Goals Specific Targets (SDG 2)," Sustainability, MDPI, vol. 14(23), pages 1-24, November.
    2. Teodor Marian Cojocaru & George H. Ionescu & Daniela Firoiu & Laura Mariana Cismaș & Maria Daniela Oțil & Ovidiu Toma, 2022. "Reducing Inequalities within and among EU Countries—Assessing the Achievement of the 2030 Agenda for Sustainable Development Targets (SDG 10)," Sustainability, MDPI, vol. 14(13), pages 1-22, June.
    3. Pushkareva, Lyudmila & Galochkina, Olga & Bezgacheva, Olga, 2018. "Current trends in the banking system of Russia," MPRA Paper 97386, University Library of Munich, Germany.
    4. Nicoleta Mihaela Florea & Georgeta-Madalina Meghisan-Toma & Silvia Puiu & Flaviu Meghisan & Marius Dalian Doran & Mariana Niculescu, 2021. "Fiscal and Budgetary Policy Efforts towards Climate Change Mitigation in Romania," Sustainability, MDPI, vol. 13(5), pages 1-18, March.
    5. Dariusz Karaś & Adam Zając & Michał Wielechowski, 2025. "Macroeconomic determinants and working capital credit for micro-enterprises: evidence from Poland," Future Business Journal, Springer, vol. 11(1), pages 1-14, December.
    6. Skalická Martina & Zinecker Marek & Pietrzak Michał B. & Meluzín Tomáš & Dohnal Mirko, 2019. "Financial impact analysis of going public at the Warsaw Stock Exchange: Using Fuzzy Set Theory to understand behaviours of mature companies," Management & Marketing, Sciendo, vol. 14(1), pages 59-79, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bogdan Włodarczyk & Marek Szturo & George H. Ionescu & Daniela Firoiu & Ramona Pirvu & Roxana Badircea, 2018. "The impact of credit availability on small and medium companies," Post-Print hal-01773998, HAL.
    2. Reto Wernli & Andreas Dietrich, 2022. "Only the brave: improving self-rationing efficiency among discouraged Swiss SMEs," Small Business Economics, Springer, vol. 59(3), pages 977-1003, October.
    3. Florian Leon, 2015. "What do we know about the role of bank competition in Africa?," CERDI Working papers halshs-01164864, HAL.
    4. Yu, Y., 2014. "Essays on relationship banking," Other publications TiSEM f3d56b9e-e79e-46c4-bd42-4, Tilburg University, School of Economics and Management.
    5. Lu, Yao & Zhan, Shuwei & Zhan, Minghua, 2024. "Has FinTech changed the sensitivity of corporate investment to interest rates?—Evidence from China," Research in International Business and Finance, Elsevier, vol. 68(C).
    6. Artashes Karapetyan & Bogdan Stacescu, 2014. "Information Sharing and Information Acquisition in Credit Markets," Review of Finance, European Finance Association, vol. 18(4), pages 1583-1615.
    7. Andrea Fracasso & Valentina Peruzzi & Chiara Tomasi, 2024. "Multiple banking relationships: the role of firm connectedness," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 33(5), pages 1231-1252.
    8. Doris Neuberger & Solvig Räthke, 2009. "Microenterprises and multiple bank relationships: The case of professionals," Small Business Economics, Springer, vol. 32(2), pages 207-229, February.
    9. Eirik Gaard Kristiansen, 2005. "Strategic bank monitoring and firms’ debt structure," Working Paper 2005/10, Norges Bank.
    10. Cinquegrana, Giuseppe & Donati, Cristiana & Sarno, Domenico, 2012. "Financial constraints and relationship lending in the growth of italian SMEs," MPRA Paper 39825, University Library of Munich, Germany.
    11. Farinha, Luisa A. & Santos, Joao A. C., 2002. "Switching from Single to Multiple Bank Lending Relationships: Determinants and Implications," Journal of Financial Intermediation, Elsevier, vol. 11(2), pages 124-151, April.
    12. Diana Bonfim & Qinglei Dai, 2010. "Bank Relationships and Borrowing Costs," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    13. Tadanobu NEMOTO & Yoshiaki OGURA & Wako WATANABE, 2011. "An Estimation of the Inside Bank Premium," Discussion papers 11067, Research Institute of Economy, Trade and Industry (RIETI).
    14. Minetti, Raoul & Zhu, Susan Chun, 2011. "Credit constraints and firm export: Microeconomic evidence from Italy," Journal of International Economics, Elsevier, vol. 83(2), pages 109-125, March.
    15. Cerqueiro, Geraldo & Degryse, Hans & Ongena, Steven, 2011. "Rules versus discretion in loan rate setting," Journal of Financial Intermediation, Elsevier, vol. 20(4), pages 503-529, October.
    16. Ongena, Steven & Peydró, José-Luis & Horen, Neeltje van, 2015. "Shocks Abroad, Pain at Home? Bank-Firm Level Evidence on the International Transmission of Financial Shocks," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 63(4), pages 698-750.
    17. Gajewski, Krzysztof & Pawłowska, Małgorzata & Rogowski, Wojciech, 2012. "Relacje firm z bankami w Polsce w świetle danych ze sprawozdawczości bankowej [Bank-firm relationships in Poland in the light of data from bank reporting]," MPRA Paper 42544, University Library of Munich, Germany, revised 29 Oct 2012.
    18. Patrick Bolton & Xavier Freixas & Leonardo Gambacorta & Paolo Emilio Mistrulli, 2016. "Relationship and Transaction Lending in a Crisis," The Review of Financial Studies, Society for Financial Studies, vol. 29(10), pages 2643-2676.
    19. Lončarski, Igor & Marinč, Matej, 2020. "The political economy of relationship banking," Research in International Business and Finance, Elsevier, vol. 51(C).
    20. Dam, Kaniṣka & Roy Chowdhury, Prabal, 2021. "Monitoring and incentives under multiple-bank lending: The role of collusive threats," Journal of Economic Theory, Elsevier, vol. 197(C).

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ssi:jouesi:v:5:y:2018:i:3:p:565-580. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Manuela Tvaronaviciene (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.