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Credit Rationing with Heterogeneous Borrowers in Transition Economies: Evidence from Slovakia

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  • Pavel Ciaian

Abstract

This paper investigates the macroeconomic importance of credit rationing and whether banks use characteristics such as ownership structure and institutional type of borrowers in order to regulate the risk of loaned funds. To test this, monthly data for 2000–2002, extracted from the National Bank of Slovakia monetary review, were used. The paper finds that credit rationing was not present during the period analysed, implying that the credit market can be approximated with a typical supply and demand relationship. The second finding of the paper is that intermediaries use the ownership type and institutional form of borrowers to regulate risk.

Suggested Citation

  • Pavel Ciaian, 2004. "Credit Rationing with Heterogeneous Borrowers in Transition Economies: Evidence from Slovakia," EERI Research Paper Series EERI_RP_2004_02, Economics and Econometrics Research Institute (EERI), Brussels.
    • Handle: RePEc:eei:rpaper:eeri_rp_2004_02
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    References listed on IDEAS

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    1. Blinder, Alan S & Stiglitz, Joseph E, 1983. "Money, Credit Constraints, and Economic Activity," American Economic Review, American Economic Association, vol. 73(2), pages 297-302, May.
    2. Lubomír Lízal & Jan Svejnar, 2002. "Investment, Credit Rationing, And The Soft Budget Constraint: Evidence From Czech Panel Data," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 353-370, May.
    3. Blinder, Alan S, 1987. "Credit Rationing and Effective Supply Failures," Economic Journal, Royal Economic Society, vol. 97(386), pages 327-352, June.
    4. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    5. Maks Tajnikar, 2001. "Transitional Adjustment of Large Companies in Slovenia and Economic Policy," Post-Communist Economies, Taylor & Francis Journals, vol. 13(3), pages 331-344.
    6. Konings, Jozef & Rizov, Marian & Vandenbussche, Hylke, 2003. "Investment and financial constraints in transition economies: micro evidence from Poland, the Czech Republic, Bulgaria and Romania," Economics Letters, Elsevier, vol. 78(2), pages 253-258, February.
    7. Riley, John G, 1987. "Credit Rationing: A Further Remark [Credit Rationing in Markets with Imperfect Information] [Incentives Effects of Terminations: Applications to the Credit and Labor Markets]," American Economic Review, American Economic Association, vol. 77(1), pages 224-227, March.
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    Cited by:

    1. Drakos, Konstantinos & Giannakopoulos, Nicholas, 2011. "On the determinants of credit rationing: Firm-level evidence from transition countries," Journal of International Money and Finance, Elsevier, vol. 30(8), pages 1773-1790.

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    More about this item

    Keywords

    Credit rationing; heterogeneous borrowers; transition countries;
    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
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation

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