Female Firms and Banks’ Lending Behaviour: What Happened during the Great Recession?

24 Pages Posted: 21 Sep 2013

Date Written: June 21, 2013

Abstract

During the financial crisis banks faced liquidity shocks, and lending slowed down. The reduction in credit availability was due to demand- and supply-side factors. The decrease in turnover and investment led to a contraction of financial needs; on the other hand, the tightening of credit supply was the result of banks’ greater risk-aversion, difficulties in raising funds, and a worsening in the creditworthiness of borrowers. However, banks do not pass on liquidity shocks to borrowers according to a homogenous pattern: by following a pecking order, they first reduce lending to the marginal segment of borrowers to protect their core customers. Previous studies have shown that banks are less prone to lend to female firms than to others: lending to female firms may have suffered more during the crisis than other segments of the credit market. By using data from the Credit Register at the Bank of Italy for the period 2007-2009, we find that women-owned firms faced a more pronounced credit contraction with respect to other firms.

Keywords: financial crisis, banks, loans, women-owned firms

JEL Classification: J16, G21

Suggested Citation

Cesaroni, Francesca Maria and Lotti, Francesca and Mistrulli, Paolo Emilio, Female Firms and Banks’ Lending Behaviour: What Happened during the Great Recession? (June 21, 2013). Bank of Italy Occasional Paper No. 177, Available at SSRN: https://ssrn.com/abstract=2297869 or http://dx.doi.org/10.2139/ssrn.2297869

Francesca Maria Cesaroni

University of Urbino ( email )

Via Saffi 2
Urbino, Pesaro-Urbino 61029
Italy

Francesca Lotti

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Paolo Emilio Mistrulli (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

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