SME access to finance in Europe: structural change and the legacy of the crisis

John McQuinn
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John McQuinn: Central Bank of Ireland

No 10/RT/19, Research Technical Papers from Central Bank of Ireland

Abstract: Small and Medium Enterprise (SME) access to credit deteriorated during the financial crisis and credit constraints remain high for some euro area countries. This paper investigates the factors linked to the variation in SME credit access across euro area countries. After controlling for the fundamental performance and characteristics of firms and bank funding costs, I investigate the financial and macroeconomic channels that explain variation in credit constraints across countries and time. The paper combines approaches taken in the literature, extends the analysis to the post-crisis period, distinguishes between alternative measures of credit constraints and incorporates the role of soft information. The most economically important channels associated with SME access to finance are found to be the soft information channel and firm indebtedness. Bank competition and the condition of bank balance sheets are also found to have economically important relationships with SME access to finance.

Keywords: access to finance; SMEs; financial crises; soft information; firm indebtedness; bank competition; bank balance sheets; capital markets union. (search for similar items in EconPapers)
JEL-codes: D22 D82 E66 G01 G21 (search for similar items in EconPapers)
Date: 2019-08
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-eec, nep-ent, nep-fdg and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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