Dynamics of Perceived Bank Lending Policy and Credit Market Experience: Evidence from a Firm Survey

Mardi | 2018-07-10
Salle des thèses 15h – 16h20

Jarko FIDRMUC – Christa HAINZ – Werner HöLZL

Bank lending policy has gained importance since the financial crisis. We study the determinants of firms’ perceived bank lending policy using panel data from the Austrian Business Climate Survey between 2011 and 2016. Our results show that firms’ perceptions of aggregate lending policy depend on their individual credit market experience. Different categories of negative experience, ranging from worse conditions to loan rejections, have strongly negative, persistent and surprisingly similar effects on perceptions. Moreover, firms that do not need a loan are more likely to perceive lending policy as standard and are less likely to revise their perceptions. Our results are in line with theories on sticky information, rational inattention and pessimism bias.