Credit rationing and firm size

• Main Authors: G. CALCAGNINI, D. IACOBUCCI, D. TICCHI
• Format: Article
• Language: Italian
• Published: Associazione Economia civile 2013-10-01
• Series: Moneta e Credito
• Subjects: Credit rationing, firm discrimination, Stiglitz-Wiess model
• Online Access: http://ojs.uniroma1.it/index.php/monetaecredito/article/view/10865

<p class="Body">This paper examines the likelihood of credit rationing faced by firms of different size. Contrary to common thought, several recent contributions on this topic argue that, when rationing credit, size alone is not a sufficient condition for discriminating between firms. We show that this result can be predicted using a framework based on the Stiglitz-Weiss model. In particular, in an environment of asymmetric information, we highlight how the likelihood of credit rationing depends upon the shape of the distribution function of project returns, especially its asymmetry and Kurtosis. Our empirical results do not support the hypothesis that small firms face more credit rationing than larger firms.</p>