Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229034
Authors: 
Cherchye, Laurens
De Rock, Bram
Ferrando, Annalisa
Mulier, Klaas
Verschelde, Marijn
Year of Publication: 
2020
Series/Report no.: 
ECB Working Paper No. 2420
Abstract: 
We propose a new methodology to recover firm-time varying financial constraints from firms' production behavior. We model financial constraints as the profitability that firms forgo when budget constraints on production inputs bind, impeding them from using the optimal level of inputs and technology. We estimate and validate our measure using unique data combining firms' balance sheets with survey information on self-reported financial constraints, like loan rejections. In contrast to three popular indices of financial constraints, our measure recovers financial constraints beyond observable firm characteristics, recovers cross-sectional and time-varying stylized facts of financial constraints, and is applicable to both public and private firms.
Subjects: 
Financial constraints
identification
access to finance
indicators
production function
JEL: 
E44
G00
G30
G32
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4063-4
Document Type: 
Working Paper

Files in This Item:
File
Size
911.26 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.