Existence of credit rationing for SME’s in the Belgian corporate bank loan market

Credit rationing is by many Keynesian economists nowadays seen as one of the most important examples of market failure in a modern capitalistic economy. Credit rationing occurs if in equilibrium the demand for loans exceeds the supply at the ruling price (interest rate). Since (Belgian) SMEs heavily rely on bank finance, this restricted access to bank finance could have a negative effect on the investment in new profitable projects and growth of the economy. Due to the lack of empirical research in this domain, we study the empirical significance of credit rationing for SMEs in a Belgian (bank... Mehr ...