European SME Financing: An Empirical Taxonomy

Masiak, Christian; Moritz, Alexandra; Lang, Frank

doi:10.1007/978-3-030-17612-9_1

Cited by 9 publications

(9 citation statements)

References 52 publications

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“…Financing needs of micro-enterprises along their evolution are evaluated and discussed including aspects of using of non-formal sources as often formal financing sources are not available, indicating in the lack of knowledge for loan application preparation to the main reason (Prijadi R. et al, 2020). For the last decade economists have been preoccupied with the decline in bank financing to small businesses and entrepreneurs (Fenwick M. et al, 2018), the SME financing types can not only be profiled according to their firm-, product-, industry-and country-specific characteristics but also to macroeconomic variables (Masiak C. et al, 2020). Alternative financing is an important type of financing for small and medium-sized innovative enterprises, as currently there are difficulties in obtaining financing from traditional sources (Chebukhanova L., Blokhina T., 2020 Mobile money usage is becoming more and more often used world-wide as well as discussed and evaluated in the scientific publications by many researchers (Odoom R., Kosiba J.P., 2020).…”

Section: Theoretical Findingsmentioning

confidence: 99%

Challenges on accessing finance for micro-enterprises in Latvia

Beizitere¹,

Sloka²,

Brence³

et al. 2021

Economic Science for Rural Development

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Financial support of companies for their development is considered and realised by many countries worldwide, also in Latvia. Latvia has been receiving critical remarks from entrepreneurs in regard to high level of refuse for financing from the financing institution ALTUM which is the principal intermediary of EU funds and provides resources to support entrepreneurship in Latvia. Statistical data indicate that there are significant reductions of micro-enterprises during recent years. The survey data showed that ALTUM rejected 39 % of the surveyed micro-enterprises from those who had submitted applications within three years. In turn, only 6 % of micro-enterprises have received full financing from banks or leasing companies. Funders rejected applications from 9 % of micro-enterprises while another 5 % themselves withdrew funding due to unacceptable conditions. Latvia has to address serious challenges in entrepreneurship development in regions in particular with a lower economic activity. The aim of the paper is to analyse situation of micro-enterprises for receiving funding. Research methods: analysis of scientific publications and results of previous conducted research, analysis of data obtained in survey of enterprises on questions of financing refuse and on evaluations related to financing conditions in recent years. For a more thorough data analysis (used evaluation scale 1-5) indicators of descriptive statistics are applied: indicators of central tendency or location – arithmetic means, mode, median; indicators of variability or dispersion – range, standard deviation, standard error of mean; cross – tabulations; testing of statistical hypotheses using t-test and analysis of variance – ANOVA; correlation analysis. Research results indicate that the use of more precise requirements of financing for micro-enterprises by finance institution ALTUM could benefit in better development of entrepreneurship in regions of Latvia.

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Section: Theoretical Findingsmentioning

confidence: 99%

Challenges on accessing finance for micro-enterprises in Latvia

Beizitere¹,

Sloka²,

Brence³

et al. 2021

Economic Science for Rural Development

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“…The National Bank of Poland (NBP) analyses indicate that the sector of non-credit financial institutions does not create significant threats to commercial banks, as it is not a significant source of financing the economy in Poland. 12 However, in crisis situations there may be restrictions in supply on the credit market resulting in a reduction in lending, mainly for smaller companies and market shortages 13 .…”

Section: Substitutability and Complementarity Of Forms Of Fundingmentioning

confidence: 99%

Changes in Substitution of Bank Loans and Eu Subsidies in Polish Businesses

Filip

2021

pefim

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The aim of the article was to determine the degree of bank loan replacement by Polish businesses after profiting from EU help. The identification of similarities and differences was made amonggroups of enterprises that benefit or not from the state aid in the EU’s successive financial perspectives, over the years 2007-2017. Changes in companies’ assets and performance, andvariables referring to the financial effectiveness, were analyzed. The logit model was used in order to define characteristics that have influence on the significance of determinants of financing withpublic subsidies. The cross-sectional nature of data allows for identification of a positive statistical relationship between subsidies and bank loans in medium-sized enterprises. In the course of the study it was established that companies receiving the state aid reduced their share of bank credits on balance sheet totals, as well as indebtedness in total. Over a period of time, thesubsidizing has increased the importance and scope of using bank loans. State aid resources were used as a complementary source of capital for enterprises.

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“…Smaller firms are thus in a far worse position than larger ones to meet the requirements of banks and financial intermediaries to mitigate the problems of adverse selection and moral hazard, and are the most likely victims of credit rationing (Bellier et al, 2012). Because of these constraints, smaller firms often restrict their investments to internally generated funds (Masiak et al, 2017). Therefore, we hypothesize that:…”

Section: Theoretical Framework and Research Hypothesesmentioning

confidence: 99%

“…Indeed, they use trade credit for short‐term financing (Berger & Udell, 1998; Ogawa et al, 2013; Petersen & Rajan, 1995), obtain state subsidies (Gerritse & Rodríguez‐Pose, 2018), or rely on informal sources of finance—such as family or friends (Chavis et al, 2011; Hanedar et al, 2014). Only by following these various channels they can overcome bank credit restrictions and thus expand investment opportunities otherwise based solely on the available cash flow (Masiak et al, 2017).…”

Section: Theoretical Framework and Research Hypothesesmentioning

confidence: 99%

Credit constraints, labor productivity, and the role of regional institutions: Evidence from manufacturing firms in Europe

Rodríguez‐Pose

Ganau

Maslauskaite

et al. 2020

Journal of Regional Science

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investment-to-cash flow sensitivity-and firmlabor productivity-during the period 2009-2016, using a sample of 22,380 manufacturing firms from 11 European countries. It also assesses how regional institutional quality affects productivity at the level of the firm both directly and indirectly. The empirical results highlight that credit rationing is rife and represents a serious barrier for improvements in firm-level productivity and that this effect is far greater for micro and small than for larger firms. Moreover, high-quality regional institutions foster productivity and help mitigate the negative credit constraints-labor productivity relationship that limits the economic performance of European firms. Dealing with the European productivity conundrum thus requires greater attention to existing credit constraints for micro and small firms, although in many areas of Europe access to credit will become more effective if institutional quality is improved.

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European SME Financing: An Empirical Taxonomy

Cited by 9 publications

References 52 publications

Challenges on accessing finance for micro-enterprises in Latvia

Challenges on accessing finance for micro-enterprises in Latvia

Changes in Substitution of Bank Loans and Eu Subsidies in Polish Businesses

Credit constraints, labor productivity, and the role of regional institutions: Evidence from manufacturing firms in Europe

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