Financing small and medium-sized enterprisesnew empirical evidence from 25 European countries

Resumen

The financing of small and medium-sized enterprises (SMEs) has been the focus of attention of traditional financial literature. SMEs are usually perceived as riskier firms than larger companies due to their specific characteristics, which exacerbate informational asymmetries and agency problems. As a consequence, SMEs end up having limited access to debt financing and experiencing severe credit constraints. However, the financial decisions of SMEs not only depend on their characteristics, but also country factors play an important role in their financing. The aim of this Doctoral Thesis is to provide new insights into how the institutional environment where firms operate influences their access to financing while controlling for firm-specific characteristics. To do that, we use a sample of 4,583 SMEs from 15 Western European countries and 10 Eastern European countries. The sample has been obtained from the Flash Eurobarometer Survey on SME Access to Finance carried out by the European Commission between 2005 and 2006. The survey includes firms from developed and developing countries, which assures the existence of large variations in country-specific characteristics and increases the extrapolation and generalization of our conclusions for European SMEs. The evidence presented in this Doctoral Thesis has clear implications for firms, financial institutions, and policy makers. First, firms should be aware that the ongoing changes in financial markets might result in a less friendly environment for their financing needs. Under this situation, our results can help to understand that there are suitable options to complement bank credit such as factoring and leasing, allowing the diversification of the capital structure of firms. Second, financial institutions should take our results into account to understand firms’ behavior in order to achieve a better flow of capital to SMEs. Finally, policy makers should take our results into account when revising policies concerning access to external financing for SMEs because of their core contribution to innovation, job creation and economic growth. http://repositorio.bib.upct.es/dspace/