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EIB Working Papers 2017/03 – Loan characteristics, Firm Preferences and Investment: Evidence from a unique experiment

EIB Working Papers 2017/03 – Loan characteristics, Firm Preferences and Investment: Evidence from a unique experiment

  •  Release date: 30 June 2017
economics working paper 2017 03 en
This paper uses a unique experiment conducted as part of the EIB Investment Survey (EIBIS) to provide novel evidence on firms’ preferences over loan characteristics and the relation between terms of credit and investment decisions.

The design of the experiment allows revealing firm’s financing preferences and willingness-to-pay in a clean and straightforward manner.

The results show that firms are especially sensitive to the loan amount, the collateral requirement and the interest rate. Results are heterogeneous between sectors, size classes and types of projects.


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