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What lies behind credit rationing? A survey of the literature

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  • Annie bellier
  • Wafa Sayeh
  • Stéphanie Serve

    () (THEMA, Universite de Cergy-Pontoise
    THEMA, Universite de Cergy-Pontoise
    THEMA, Universite de Cergy-Pontoise)

Abstract

Since World War II, the concept of credit rationing (CR) has been a topic of extensive investigations, both theoretical and empirical. From the theoretical point of view, several attempts have been made to define the extent to which a firm can be identified as credit rationed in macroeconomic and microeconomic financial frameworks. In the context of the current financial crisis, CR is strategically important given the financial difficulties faced by small business firms. The first purpose of this article is to provide an historical context for the theoretical frameworks of CR to analyze the existing definitions and typologies. From an empirical point of view, the main obstacle is that a direct measure of CR is not directly observable, considering that the answer is given by the firm and/or the bank. In light of the previously defined typology, the second purpose of this article is to present both the measures of CR and the main driving factors that have been tested in the empirical literature. Special attention is paid to the supply-demand interaction via the impact of the bank relationship on CR.

Suggested Citation

  • Annie bellier & Wafa Sayeh & Stéphanie Serve, 2012. "What lies behind credit rationing? A survey of the literature," THEMA Working Papers 2012-39, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  • Handle: RePEc:ema:worpap:2012-39
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    References listed on IDEAS

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    Cited by:

    1. Jakab, Zoltan & Kumhof, Michael, 2015. "Banks are not intermediaries of loanable funds – and why this matters," Bank of England working papers 529, Bank of England.
    2. Lorenzo Burlon & Davide Fantino & Andrea Nobili & Gabriele Sene, 2016. "The quantity of corporate credit rationing with matched bank-firm data," Temi di discussione (Economic working papers) 1058, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    credit rationing; small business; bank relationship;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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