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The determinants of credit rationing of SMEs in France: A disequilibrium model upon a balanced panel
[Les déterminants du rationnement du crédit des PME en France : un modèle de déséquilibre sur un panel cylindré (2002-2010)]

Author

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  • Philippe Adair

    () (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée)

  • Mohamed Adaskou

Abstract

Abstract Credit rationing results from the existence of asymmetric information, both ex ante and ex post the signing of the loan agreement. It refers to an equilibrium wherein which banks grant credit to some borrowers whereas they crowd out others that would pay nevertheless a higher interest rate. A conventional assumption is that Small and medium enterprises (SMEs) are most affected by credit crunch. We design a disequilibrium model to analyse the determinants of credit rationing upon a balanced panel of 2,370 French SMEs over the period 2002-2010. According to the estimates of simultaneous equations, the desired demand for bank credit is determined by exogenous factors from the supply-side such as interest rate and the guarantees required by banks. Banks decide to grant credit based on the means to ensure the payback of loans. The average share of rationed SMEs, whether partially or totally, is 23.46 per cent of the sample. This result suggests that access to bank loans is not a major issue for French SMEs, which have been operating for a decade. Keywords: balanced panel; credit rationing; disequilibrium model; France; SME, JEL: G21, G23

Suggested Citation

  • Philippe Adair & Mohamed Adaskou, 2016. "The determinants of credit rationing of SMEs in France: A disequilibrium model upon a balanced panel
    [Les déterminants du rationnement du crédit des PME en France : un modèle de déséquilibre sur un
    ," Post-Print hal-01667299, HAL.
  • Handle: RePEc:hal:journl:hal-01667299
    Note: View the original document on HAL open archive server: https://hal-upec-upem.archives-ouvertes.fr/hal-01667299
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    References listed on IDEAS

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    Keywords

    balanced panel; credit rationing; disequilibrium model; SMEs; France;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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