Since 2014
Credit Rationing as Another Cause of Financial Crisis: Evidence from Thailand
NIDA Economic Review Journal
View Archive Info| Field | Value | |
| Title |
Credit Rationing as Another Cause of Financial Crisis: Evidence from Thailand
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| Creator |
Rukumnuaykit, Pungpond
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| Description |
This paper examines the credit market to determine whether slow growth was caused by problemsin credit markets as many scholars have suggested. In particular, the question of how a rise ininterest rates affects behaviors of the banks and the firms, and how and to what extent creditrestriction affects sales and growth were investigated. The model developed in the paper suggeststhat when loan terms are not restricted, lenders will statistically discriminate against small firms.In other words lenders will charge small firms higher interest rates. When loan contract terms arerestricted, lenders might ration credit buy not lending to small firms that have higher risks.However, when interest rates are high, large firms might self-select out of the loan marketsbecause they have other alternatives to cope with credit problem. The analysis from Thai dataduring the financial crisis reveals that Thailand faced mild credit rationing problems before thecrises. The problem became stronger, but not severe, during the crises. Trade credit-borrowingratio and the results from our regression equation suggest that the self-selection problem wasmore pronounced during the crises. However, even though problems of credit rationing andadverse selection did occur, the importance of trade credits and borrowing on sales declinedduring the crises.
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| Publisher |
Development Economic Review
พัฒนาการเศรษฐกิจปริทรรศน์ |
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| Date |
2007-06-01
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
https://tci-thaijo.org/index.php/NER/article/view/23126
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| Source |
Development Economic Review; Vol 2 No 2 (2550): NIDA Economic Review Journal; 1
พัฒนาการเศรษฐกิจปริทรรศน์; Vol 2 No 2 (2550): NIDA Economic Review Journal; 1 1906-2540 |
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| Language |
eng
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| Relation |
https://tci-thaijo.org/index.php/NER/article/view/23126/19751
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| Rights |
Copyright (c) 2017 Development Economic Review (พัฒนาการเศรษฐกิจปริทรรศน์)
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