What firms don't like about bank loans: New evidence from survey data

Atanas Kolev, Laurent Maurin and Matthieu Ségol

No 2019/07, EIB Working Papers from European Investment Bank (EIB)

Abstract: We use the association between non-financial firms and their banks, an information available in the European Investment Bank Investment Survey (EIBIS), to disentangle the effects of borrowers' and lenders' financial weakness on the satisfaction with the loan contracted. The dataset matches survey data of non-financial firms about their satisfaction with bank lending with their financial data and the financial data of their banks. We find evidence of both demand and supply factors determining firm satisfaction with bank loan financing: non-financial firms with weaker finances and those financed by weaker banks are less satisfied with their bank financing. We also find that the impact of supply factors differs across regions within the EU: the effect of bank's financial weakness on borrower satisfaction is not significant in core countries but is in periphery countries.

Keywords: financial constraints; bank lending; survey data; bank-firm matching; satisfaction with bank loans; bank weakness; EU regions (search for similar items in EconPapers)
JEL-codes: E44 G01 G32 L25 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cfn, nep-eec and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:eibwps:201907

DOI: 10.2867/215599

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