Tackling Small and Medium Enterprise Problem Loans in Europe

Bergthaler, Wolfgang; Kang, Kenneth; Liu, Yan; Monaghan, Dermot

doi:10.5089/9781498384834.006

Cited by 89 publications

(41 citation statements)

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“…Furthermore, some consumers may even find it difficult to repay the loan because interest rates increase exceeds the rise in a consumer's income. If interest rates rise sharply and stay high for a long period, some consumers will default on their loans (Hou and Dickinson 2007, Beck et al, 2013, Klein 2013and Bergthaler et al, 2015.…”

Section: Discussionmentioning

confidence: 99%

The Effect of Suspended Salary Allowance on Business Loan in Saudi Arabia

Alessa¹,

Alsaeed²,

Azibi³

et al. 2017

BMR

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The research was carried out to study two factors; first the impact of suspended Salary allowance (about 20% of Saudi Salary per month) on borrowing loans from national and commercial Saudi's banks. Secondly, to analyze the effects of suspended salary allowance on re-payment of loans. This study showed that most Saudi banks' customers should be well-aware of the influence of suspended salary allowance on borrowing bank loans and re-payment of loans. It was noticed that the provision of loans to Saudi people after suspended salary allowance had a great impact on their businesses performance. The study also found that salary cuts together with other factors including high interest rates may be the most important causes of poor business performance.

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Section: Discussionmentioning

confidence: 99%

The Effect of Suspended Salary Allowance on Business Loan in Saudi Arabia

Alessa¹,

Alsaeed²,

Azibi³

et al. 2017

BMR

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“…Country factors are important in explaining different access to bank lending and firms' size, firms' age and rate of growth can be explanatory variables. (Bergthaler, Kang, Liu & Monaghan, 2015;Canton, Grilo, Monteagudo & van der Zwan, 2013;Jõeveer, 2013). The financial recession in 2008 and the Euro area public debt crisis in 2012 have led to a process of credit crunch (Dimelis, Giotopoulos & Louri, 2013), a situation of credit contraction that has affected the firms' capacity not only to finance new investment in non-current assets, even made more difficult to finance their daily operations.…”

Section: Literature Reviewmentioning

confidence: 99%

European macroeconomic imbalances at a sectorial level: Evidence from German and Spanish food industry

Aznar¹,

Sayeras²,

Lascorz³

et al. 2018

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Purpose: This research has analyzed the structural differences observed comparing medium size Spanish and German firms in the food industry, specifically biscuit production. A second objective has been to analyze if the different macroeconomic conditions in Spain and Germany have affected the performance of firms.Design/methodology: Using financial information from AMADEUS data base, a sample of firms (135 observations) in the food industry from Spain and Germany have been analyzed, considering the changes observed in the periods 2007-2009, 2010-2012 and 2013-2015. Productivity, real investment, cost per employee, profitability and interests paid by the firms are among the variables considered. The different hypotheses proposed have been tested using non-parametric test, mainly, Mann-Whitney test and Rho Spearman coefficient.Findings: Medium size German firms are bigger, using number of employees, than Spanish firms and show a higher profitability (using ROE) whatever the period consider. The evidence suggests that after a certain threshold size the correlation between size and productivity is negative. An interesting result is the negative correlation between interest rate and labour productivity; financial conditions can have a clear effect on firm's performance. At this sector level there is no evidence of the process of internal devaluation, probably because the growth observed either by increase in real investment or sales have been accompanied by the need to hire skilled labour. Research limitations/implications:The main limitation is that this research has only focused on particular economic activity, biscuit producers, to include others firms in the food industry must be considered in future research. Practical implications:Size is a strategic decision that managers must face, to understand how labour productivity and financial performance is affected by size will help to take the optimum decision. The performance of the firm is also partially affected by the interest rate that the firm faces, the negative correlation found between interest rate and labour productivity is important in informing right decisions about increasing firm's debt level. Social implications:Europe is rethinking industrial policy in the aftermath of the financial crisis (2008)(2009) and in a global context with an increasing number of industrial activities locating in low labour costs destinations. Understanding the structural differences that industries across the European countries show is a key factor in deciding an efficient industrial policy.-47-Intangible Capital -https://doi.org/10.3926/ic.1101 Originality/value: The last decade has accentuated the macroeconomic differences, in terms of long term interest rates or levels of unemployment between the core of Europe, Germany, and the periphery, including countries like Spain. This research is one the first ones in analyzing how these differences are affecting financial performance and structural differences in a particular industry, that is one of the most important ex...

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“…At times, however, deviations from absolute priority may be warranted (e.g. priority for new financing), when it might lead to a successful restructuring and a higher final recovery value for all creditors (EC 2014a and 2014b; Bergthaler et al, 2015). However, the extent and the exact design of the priority is less clear cut.…”

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confidence: 99%

“…Court involvement -directly or through court-appointed insolvency practitioners -is important in guaranteeing the rights of different parties involved and can increase ex post efficiency by acting as a coordination tool. However, court involvement can come at a cost -particularly for smaller firms that lack scale to cover the associated fixed costs (Bergthaler et al, 2015) -so it is essential to: i) limit court involvement to only those cases where it is absolutely necessary; ii) improve the expertise of the courts to deal with complex insolvency cases where their intervention is required; and iii) effectively design the compensation schemes for insolvency practitioners.…”

Section: 56mentioning

confidence: 99%

“…In some European countries, inefficient insolvency regimes have recently been identified as a barrier to addressing the rise in non-performing loans (NPLs), which can tie up capital and burden banks' loan officers with restructuring tasks rather than making new loans that could finance investment, which is currently very weak (Bergthaler, et al, 2015;OECD, 2015b). Moreover, without suitable debt restructuring tools, over-extended firms could have little incentive to invest because any return is used to service their debt.…”

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confidence: 99%

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