Imperfect Information, Uncertainty, and Credit Rationing: A Reply.
Quarterly Journal of Economics (Impact Factor: 5.92). 02/1984; 99(4):869-72. DOI: 10.2307/1883130
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ABSTRACT: This paper measures the extent to which small businesses in the United States in the late 1980s were able to access the external credit finance they desired. We argue that a comprehensive definition of credit rationing must account for both (a) creditworthy firms that apply for and are denied financing, and (b) creditworthy firms that decide not to apply for desired external financing, given expectations about how long it may take to obtain financing and the evolution of investment opportunities.Data from a national survey of small businesses shows that only 2.14 percent of firms did not obtain the funding for which they applied in 1987–88. Another 2.17 percent may have faced some short-run constraints on investment: they were initially denied by lenders but received the credit for which they applied by the end of the sample period. Finally, an additional 4.22 percent of firms are estimated to have been discouraged from applying because of expected denial.Constrained firms are smaller, younger, and more likely to be owned by their founders than those firms that successfully applied for external finance. The total number of credit constrained firms seems quite small, particularly because we cannot distinguish empirically between creditworthy and noncreditworthy firms. Thus the extent of true credit rationing appears quite limited.Small Business Economics 01/2000; 14(2). · 1.55 Impact Factor
Article: Financing the German Mittelstand[Show abstract] [Hide abstract]
ABSTRACT: This paper describes how the German Mittelstand, or small- and medium-sized enterprises, are financed in Germany. The role of the German Mittelstand, both in a static and in a dynamic framework, is described and contrasted with that of the same size group in other leading industrialised countries. We find that in general, the Mittelstand has played a mmore important role in Germany than in other industrialised nations, such as the United States or the United Kingdom. The traditional success of the German Mittelstand is partly attributable to a system of finance that is richly layered by complementary institutions designed to meet the financial needs of both large and smaller enterprises. However, we find evidence that even under the German system of finance liquidity constraints exist and are greater for smaller firms. The German system of finance moreover seems particularly deficient in the channeling of funds to new firm startups in the newer industries.Small Business Economics 01/2001; 9(2). · 1.55 Impact Factor
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ABSTRACT: There are many circumstances where individuals are subject to constraints other than income and prices. Evaluation of welfare change from a price-taking position to a quantity-constrained position presents special problems. While remaining firmly in the partial-equilibrium tradition, indifference curves in the price-quantity space are applied to the identification of an equivalent variation. a modified Marshallian measure and a compensating variation in quantity-constrained situations. These measures satisfy the condition of CV < MS < EV for a normal good. A Marshallian measure that has been used—the ‘simple Marshallian measure’—is shown to have a considerable drawback.Economic Record 06/1981; 57(2). · 0.38 Impact Factor
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