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Credit Rationing and Mature French SMEs: A Disequilibrium Model

Sciprofile linkPhilippe Adair, Sciprofile linkMohamed Adaskou
World Journal of Applied Economics , Volume 6, pp 55-72; doi:10.22440/wjae.6.1.4

Abstract: A conventional assumption that deserves testing is that small and medium-sized enterprises (SMEs) are most affected by credit crunch. In this respect, a disequilibrium model is designed to analyse the determinants of credit rationing upon a balanced panel of 2,370 mature 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. The credit supply-side validates best trade-off theory, whereas the credit demand-side validates best pecking order theory. The average share of rationed SMEs is seven per cent of the sample, suggesting that access to bank loans is not a major issue for mature French SMEs.
Keywords: model / disequilibrium / credit / side / mature French SMEs
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