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Business & Economics

HOW DO BANK CREDIT TERMS AFFECT CREDIT ACCESS OF ENTERPRISES IN EUROPE? AN EMPIRICAL RESEARCH FROM THE PERSPECTIVE OF INSTITUTION-BASED VIEW
Iveta Voznakova, Mehmet Civelek, Roman Hlawiczka

ABSTRACT: Enterprises suffer from bank credit access, especially in countries where economic, legal and political institutions are weak. This is because depending on the quality of these formal institutions that are based on Institution-based View, banks can apply various lending terms and conditions that might create different credit obstacles in various countries. In this regard, the objective of this paper to find out whether the impact of the credit conditions on credit access of enterprises differ depending on countries where they are located. The results from Binary Logistic Regression analyses confirm the international differences in the impact of credit conditions on bank credit access of enterprises. While Slovak and Polish firms that observe strict lending terms of banks, are more likely to access to finance, the perceptions of Czech and Hungarian enterprises regarding lending terms do not affect their credit access.

KEYWORDS:  bank finance, credit access, Institution-based View, governments’ financing approaches, banks’ credit conditions, European enterprises.

JEL classification:  D53, G21, G,28, L21.