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GTAP Resources: Resource Display

GTAP Resource #3291

"Credit Constraints, Heterogeneous Firms and Loan Defaults"
by Ciaian, Pavel, Jarko Fidrmuc, d'Artis Kancs and Jan Pokrivcak


Abstract
In light of the recent financial and economic crisis the present paper analyzes the determinants of loan default. We employ a unique firm-level panel data of 700 bank loans given to small and medium sized enterprises in Slovakia between 2000 and 2005 to investigate three loan default hypothesis. Testing the Sector-Risk Hypothesis, we find that agro-food industry does not exhibit higher default rate than other sectors. Testing the Firm-Risk Hypothesis, we find that highly indebted firms are more likely to default on their loan than other firms. Testing the EU Subsidy Hypothesis we find that the newly introduced subsidy system, which is decoupled from production, provides a secure source of income and hence reduces the probability of loan default.


Resource Details (Export Citation) GTAP Keywords
Category: 2010 Conference Paper
Status: Published
By/In: Presented at the 13th Annual Conference on Global Economic Analysis, Penang, Malaysia
Date: 2010
Version:
Created: Kancs, D. (4/14/2010)
Updated: Kancs, D. (11/29/2011)
Visits: 2,100
- Domestic policy analysis
- Agricultural policies
- European Union


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