Financing constraints, credit rationing and financing obstacles: evidence from firm-level data in South-Eastern Europe

Financing constraints have been one of the major impediments to doing business in transition economies in general and South-Eastern Europe in particular. Utilizing firm-level survey data and extensive econometric modelling, the paper provides new evidence on financing constraints, credit rationing and financing obstacles for firms in Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Romania and Serbia and Montenegro. The findings suggest that these phenomena are prevalent in the SEE region, especially in the small business sector, a driving force of economic development in these countries. Based on the findings, a number of policy implications aiming at reducing financing constraints for the small business sector are derived.