Demand for Debt and Equity Before and After the Financial Crisis

15 Pages Posted: 28 Nov 2012

Date Written: November 28, 2012

Abstract

Supply and demand responses to financial crises result in fluctuations in credit flow to the private sector. Policy makers concerned with the sustainability and growth of viable firms should disaggregate these responses. Utilizing firm level data, this study investigates characteristics of firms applying for external finance before and after the financial crisis, along with characteristics of successful applicants. Notwithstanding changes in credit conditions, salient features of external financing demand endure across the period, including ownership, asset structure, age and size. Failure to secure debt in an earlier period does not deter firm owners from applying for loans in a subsequent period. Evidence suggests that the most financially distressed firms are suffering the greatest consequences of the credit crunch.

Keywords: SME finance, discouraged borrowers, credit crunch, procyclical lending, sectoral differences

JEL Classification: G32, G21

Suggested Citation

Mac an Bhaird, Ciarán, Demand for Debt and Equity Before and After the Financial Crisis (November 28, 2012). Available at SSRN: https://ssrn.com/abstract=2181872 or http://dx.doi.org/10.2139/ssrn.2181872

Ciarán Mac an Bhaird (Contact Author)

Dublin City University ( email )

Ireland 9
Dublin 9, leinster 9
Ireland

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
192
Abstract Views
1,047
Rank
285,122
PlumX Metrics