Financing Growth: Recent Developments in the European Scene

Donckels, Rik

doi:10.1002/9781405164214.ch10

Cited by 2 publications

(2 citation statements)

References 54 publications

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“…As reported by Coface (2017), in 2016, 68 percent of the Chinese companies interviewed had overdue payments and 26.3 percent of them had an average overdue payment period exceeding 90 days, while 15.9 percent of them had an average overdue payment period exceeding 150 days (compared with 21 percent in 2015). Although some SMEs can satisfy their financial needs by raising capital from their families, friends, or acquaintances (Hussain and Matlay, 2007), the vast majority rely on funding from commercial banks, other financial institutions, or venture capitalists (Donckels, 2000;Mason and Harrison, 2000;Manigart and Sapienza, 2000;Song and Wang, 2013). However, having a limited operating history or incomplete financial statements, or being a small-sized startup with high-risk potential, and characteristics that are hard to quantify, makes it difficult for most SMEs to obtain funds from institutions evaluating their financial statements (Scott, 2006).…”

Section: Introductionmentioning

confidence: 99%

Financial service providers and banks’ role in helping SMEs to access finance

Hua

2018

IJPDLM

116

127

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Purpose Despite their crucial role in sustaining national economies, small and medium enterprises (SMEs) are beset by the constraint of financing at better conditions. The purpose of this paper is to compare supply chain finance (SCF) solutions provided by commercial banks and financial service providers (FSPs) that help SMEs access financing. Design/methodology/approach This study looks at multiple case studies using in-depth interviews with focal firms (lenders) to answer the research questions. In-depth interviews were conducted with three Chinese FSPs and three commercial banks providing working capital to the same SMEs. The unit of analysis is SCF solutions that have made the companies competitive in the industry. Findings The case studies show that the acquisition of transaction information and business credit in SCF can reduce ex ante information asymmetry. SCF utilizing receivable transfers, closed-loop business, relational embeddedness, and a combination of outcome control and behavioral control can also reduce ex post information asymmetry. For these reasons, compared with commercial bank-dominated SCF, SCF adopted by FSPs in the supply chain can better reduce information asymmetry. Originality/value This study contributes to the emerging literature exploring the impact of SCF on SMEs accessing financing. In particular, this study provides supply chain management and operations insights on SCF and their consequent influence. Previous research has focused on the direct dyadic relationship between lenders and borrowers while neglecting supply chain effects. Uniquely, this study explores the different ways commercial banks and FSPs implement SCF solutions.

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Section: Introductionmentioning

confidence: 99%

Financial service providers and banks’ role in helping SMEs to access finance

Hua

2018

IJPDLM

116

127

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“…For instance, searching for suitable business partners and customer credits, and the absence of adequate funding are major obstacles to such entrepreneurial processes (Westhead and Wright, 2000). While small firms may choose to, or simply have to, rely on loans from their family and friends (Hussain and Matlay, 2007), growth oriented firms usually depend on funding provided by banks, financial institutions or venture capitalists (Donckels, 2000;Kumar and Rao, 2015). Exporting is a common way to grow, and firms that are proven exporters are likely to have developed a track record and a reputation that is beneficial for funding approval (Van Caneghem and Van Campenhout, 2012).…”

Section: Bank Servicesmentioning

confidence: 99%

Bank relationships’ contributions to SME export performance

Lundberg

2019

IJBM

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Purpose The purpose of this paper is to examine to what extent, and in what ways, various types of bank support improve small and medium-sized enterprise (SME) export performance. It contributes to bank marketing and international marketing theory and practice by clarifying bank contributions to SME export performance at the firm level. Design/methodology/approach The study method is an on-site survey, encompassing 135 manufacturing Swedish SMEs. Five hypotheses are tested using ordinary least squares regression. Findings The higher the export performance, the greater the importance attributed to bank funding of international business. The importance of transaction and/or currency services provided by banks for SMEs’ ability to do business abroad was confirmed, but with the important limitation that the effect diminishes as the number of markets increases. Furthermore, the results indicate that SMEs with low export performance attach a high importance to the advisory services that banks can offer regarding international business. No significant results for knowledge sharing or support from bank contacts were found. Practical implications SME managers are encouraged to view banks as potential providers of a diverse set of value-added resources while taking into consideration that some banks will have more developed resources and support policies than others. The study results also assist banks in building effective strategies for enhancing their relationships with SME clients, as it provides detailed information on how SMEs relate different kinds of bank services to their export performance. Originality/value As the first paper to describe SME-perceived relationships between different bank services and export performance, this study informs bank marketing and international marketing theory about bank contributions to SME internationalisation.

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Financing Growth: Recent Developments in the European Scene

Cited by 2 publications

References 54 publications

Financial service providers and banks’ role in helping SMEs to access finance

Financial service providers and banks’ role in helping SMEs to access finance

Bank relationships’ contributions to SME export performance

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