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Credit Rationing in Greece During and After the Financial Crisis

Author

Listed:
  • Petr Korab

    (Mendel University in Brno, Faculty of Business and Economics, Department of Finance
    The Research Centre)

  • Jitka Pomenkova

    (Brno University of Technology, Faculty of Electrical Engineering and Communication, Department of Radio Electronics)

Abstract

The financial crisis has revealed the vulnerability of the Eurozone’s banking sector to adverse macroeconomic shocks. In this paper we investigate corporate access to bank credit in Greece, combining microeconometric and macroeconometric empirical methods. We employ the Non-parametric Kernel estimate to identify credit rationing at the firm-level and a disequilibrium maximum likelihood approach to identify periods of credit market disequilibrium in Greece between 2003 Q1 and 2015 Q4. The empirical analysis reveals a credit crunch in Greece between 2008 Q4 and 2012 Q4 and provides evidence that credit rationing during this period was not only caused by banking sector factors but also by increasing firm-specific credit risk and by deterioration of the financial health indicators of companies.

Suggested Citation

  • Petr Korab & Jitka Pomenkova, 2017. "Credit Rationing in Greece During and After the Financial Crisis," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(2), pages 119-139, April.
    • Handle: RePEc:fau:fauart:v:67:y:2017:i:2:p:119-139
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    References listed on IDEAS

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    Cited by:

    1. Michal Brzozowski, 2019. "Access to Credit and Growth of Firms," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(3), pages 253-274, June.

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    More about this item

    Keywords

    credit crunch; credit rationing; financial crisis; credit market disequilibrium; non-parametric estimate;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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