Lending to Small and Medium-Sized Firms : Is There an East-West Gap in Germany?

The financing of small and medium-sized firms is important for the catching-up of the East German to the West German economy since reunification. We explore whether it is restricted by unfavorable bank loan terms, using bank-survey data on lending decisions to small and medium- sized firms. A comparison of the terms of lending between the former East German and West German states yields a lending gap given by higher loan prices and collateral requirements in East Germany. This gap can be explained by differences in credit risks and lending strategies of banks. (Publication abstract.)

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Year of publication:	2009
Authors:	Lehmann, Erik
Other Persons:	Rathke, Solvig (contributor) ; Neuberger, Doris (contributor)
Publisher:	[2009]: [S.l.] : SSRN
Subject:	KMU \| SME \| Kreditgeschäft \| Bank lending \| Deutschland \| Germany \| Ostdeutschland \| East Germany \| Unternehmensfinanzierung \| Corporate finance \| Vergleich \| Comparison \| Westdeutsche Bundesländer \| West Germany
Description of contents:	Abstract [papers.ssrn.com]