Financing Micro Firms in Europe: An Empirical Analysis

Christian Masiak, Joern Block, Alexandra Moritz, Frank Lang and Helmut Kraemer-Eis

No 2017/44, EIF Working Paper Series from European Investment Fund (EIF)

Abstract: The vast majority of firms in Europe are micro firms. Still, we know little about their financing patterns. Our paper aims to close this gap. Based on a large European firm-level data set, we find that micro firms differ in their financing patterns from small and medium-sized companies. Our empirical results show that micro firms are more likely to use internal financing instruments, whereas they are less likely to use state subsidies, trade credit or asset-based financing instruments. Furthermore, micro firms differ from medium-sized firms by using more short-term debt (credit card overdrafts, credit lines and bank overdrafts). The implications of these findings for micro firms and policy makers are discussed.

Keywords: Micro firms; SMEs; enterprise financing in Europe; financing patterns (search for similar items in EconPapers)
JEL-codes: C30 G20 G30 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-pay and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:eifwps:201744

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