ORCID
Matjaž Volk 0000-0003-0859-0474
Abstract
From a sample of 75,854 Slovenian firms in the period 1995-2011, we examine the effects of a firm's access to bank credit on its growth. The results suggest that as the external financing constraint relaxes and firm gets access to credit, the reliance on internal funds to finance growth decreases. By exploring the role of available collateral in gaining access to bank credit, we find that collateral only helps larger firms to obtain credit more easily. On the other hand, collateral does not reduce micro firms' dependence on internal funds to finance growth, which suggests that even if they have collateral, banks are still unprepared to finance them, possibly due to the level of risk. It could also be that in approving credit to micro firms, other factors such as liquidity or cash flow are more highly considered by banks than the value of collateral.
Recommended Citation
Volk, Matjaž and Trefalt, Polona
(2024)
"Access to Credit as a Growth Constraint,"
Journal of Banking and Financial Economics: Vol. 2014:
No.
1, Article 2.
DOI: 10.7172/2353-6845.jbfe.2014.1.2
Available at:
https://press.wz.uw.edu.pl/jbfe/vol2014/iss1/2
First Page
29
Last Page
39
Page Count
11
Received Date
14 November 2013
Revised Date
18 November 2013
Accept Date
28 March 2014
Online Available Date
19 May 2014
DOI
10.7172/2353-6845.jbfe.2014.1.2
JEL Code
G30; G21; C23
Publisher
University of Warsaw