Leasing Decisions and Credit Constraints: Empirical Analysis on a Sample of Italian Firms


  • We would like to thank an anonymous referee and John Doukas (the editor) for helpful comments and suggestions.


Although lease financing provides a significant source of funds enabling many companies to invest, few studies examine the determinants of leasing in Continental Europe and we are aware of no study on the Italian case. This paper investigates the relationship between financial constraints and leasing decisions for a sample of Italian firms. In particular, it investigates the determinants of firm leasing decisions, the degree of substitutability between leasing and debt, and the impact of leasing on the probability of firms feeling ‘credit rationed’. Our results support the hypothesis that leasing preserves capital, thus helping to relieve credit constraints.