IDEAS home Printed from https://ideas.repec.org/p/umr/wpaper/200603.html
   My bibliography  Save this paper

Which Firms Have a Soft Loan ? Managers' Believes in a Cross-Country Survey in Transition Economies

Author

Listed:
  • Bignebat, C.
  • Gouret, F.

Abstract

This 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.

Suggested Citation

  • Bignebat, C. & Gouret, F., 2006. "Which Firms Have a Soft Loan ? Managers' Believes in a Cross-Country Survey in Transition Economies," Working Papers MOISA 200603, UMR MOISA : Marchés, Organisations, Institutions et Stratégies d'Acteurs : CIHEAM-IAMM, CIRAD, INRA, Montpellier SupAgro - Montpellier, France.
  • Handle: RePEc:umr:wpaper:200603
    as

    Download full text from publisher

    File URL: http://www1.montpellier.inra.fr/bartoli/moisa/bartoli/download/moisa2006_pdf/WP_3-2006.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Bertero, Elisabetta & Rondi, Laura, 2000. "Financial pressure and the behaviour of public enterprises under soft and hard budget constraints: evidence from Italian panel data," Journal of Public Economics, Elsevier, vol. 75(1), pages 73-98, January.
    2. Qian, Yingyi & Roland, Gerard, 1998. "Federalism and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 88(5), pages 1143-1162, December.
    3. Simeon Djankov & Peter Murrell, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 739-792, September.
    4. Berglof, Erik & Roland, Gerard, 1998. "Soft Budget Constraints and Banking in Transition Economies," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 18-40, March.
    5. Sophie Brana & Mathilde Maurel & Jérôme Sgard, 1999. "Enterprise Adjustment and the Role of Bank Credit in Russia: Evidence from a 420 Firms Qualitative Survey," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 41(4), pages 47-69, December.
    6. Philippe Aghion & Olivier J. Blanchard, 1994. "On the Speed of Transition in Central Europe," NBER Chapters,in: NBER Macroeconomics Annual 1994, Volume 9, pages 283-330 National Bureau of Economic Research, Inc.
    7. M. Dewatripont & E. Maskin, 1995. "Credit and Efficiency in Centralized and Decentralized Economies," Review of Economic Studies, Oxford University Press, vol. 62(4), pages 541-555.
    8. Schaffer, Mark E., 1998. "Do Firms in Transition Economies Have Soft Budget Constraints? A Reconsideration of Concepts and Evidence," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 80-103, March.
    9. Anderson, James H. & Korsun, Georges & Murrell, Peter, 2000. "Which Enterprises (Believe They) Have Soft Budgets? Evidence on the Effects of Ownership and Decentralization in Mongolia," Journal of Comparative Economics, Elsevier, vol. 28(2), pages 219-246, June.
    10. Li, David D. & Liang, Minsong, 1998. "Causes of the Soft Budget Constraint: Evidence on Three Explanations," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 104-116, March.
    11. Kornai, J, 1979. "Resource-Constrained versus Demand-Constrained Systems," Econometrica, Econometric Society, vol. 47(4), pages 801-819, July.
    12. J. Kornai & E. Maskin & G. Roland., 2004. "Understanding the Soft Budget Constraint," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 12.
    13. Mathias Dewatripont & Gerard Roland, 2000. "Soft Budget Constraints, Transition, and Industrial Change," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 156(1), pages 245-245, March.
    14. Kornai, Janos, 2001. "Hardening the budget constraint: The experience of the post-socialist countries," European Economic Review, Elsevier, vol. 45(9), pages 1573-1599, October.
    15. Coricelli, Fabrizio & Djankov, Simeon, 2001. "Hardened Budgets and Enterprise Restructuring: Theory and an Application to Romania," Journal of Comparative Economics, Elsevier, vol. 29(4), pages 749-763, December.
    16. Huang, Haizhou & Xu, Chenggang, 1999. "Financial institutions and the financial crisis in East Asia," European Economic Review, Elsevier, vol. 43(4-6), pages 903-914, April.
    17. Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
    18. Philippe Aghion & Olivier Jean Blanchard, 1994. "On the Speed of Transition Central Europe," NBER Working Papers 4736, National Bureau of Economic Research, Inc.
    19. J. Kornai, 1998. "Legal Obligation, Non-Compliance and Soft Budget Constraint," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 9.
    20. Boyes, William J. & Hoffman, Dennis L. & Low, Stuart A., 1989. "An econometric analysis of the bank credit scoring problem," Journal of Econometrics, Elsevier, vol. 40(1), pages 3-14, January.
    21. Brian Pinto & Marek Belka & Stefan Krajewski, 1993. "Transforming State Enterprises in Poland: Evidence on Adjustment by Manufacturing Firms," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1), pages 213-270.
    22. Joel Hellman & Daniel Kaufmann, 2003. "The Inequality of Influence," Development and Comp Systems 0308005, EconWPA.
    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. Drakos, Konstantinos & Giannakopoulos, Nicholas, 2011. "On the determinants of credit rationing: Firm-level evidence from transition countries," Journal of International Money and Finance, Elsevier, vol. 30(8), pages 1773-1790.

    More about this item

    Keywords

    SOFT BUDGET CONSTRAINT; EASTERN EUROPE;

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G3 - Financial Economics - - Corporate Finance and Governance
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:umr:wpaper:200603. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Isabelle Perez). General contact details of provider: http://edirc.repec.org/data/moisafr.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.