Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104237
Authors: 
Fidrmuc, Jarko
Hainz, Christa
Malesich, Anton
Year of Publication: 
2007
Series/Report no.: 
Munich Discussion Paper 2007-1
Abstract: 
Banks entering an emerging market face a lot of uncertainty about the risks involved in lending. We use a unique unbalanced panel of nearly 700 short-term loans made to SMEs in Slovakia between January 2000 and June 2005. Of the loans granted, on average 6.0 per cent of the firms defaulted. Several probit models and panel probit models show that liquidity and profitability factors are important determinants of SMEs defaults, while debt factors are less robust. However, we find that above average indebtedness significantly increases the probability of default. Moreover, the legal form that determines liability has important incentive effects.
Subjects: 
SME
Credit
Loan Default
Mortality Rates
Incentives
Probit
Panel Data
JEL: 
G33
G21
C25
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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