A Note on the Employment Dynamics of Credit-Constrained Small- and Medium-sized Enterprises

Ioannis Vlassas () and Christos Kallandranis ()
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Christos Kallandranis: University of West Attica

Chapter 3 in Trends, Issues, and Challenges in Banking and Finance, 2025, pp 47-57 from Palgrave Macmillan

Abstract: Abstract Examining the effects of credit rationing for small- and medium-sized enterprises (SMEs), on employment development from 2014 to 2022, this study employs a comprehensive survey microdata set compiled by the European Central Bank. Our primary findings demonstrate that considerations regarding fixed investments can be applied to employment dynamics as well. This is especially true when considering the impact of rejected borrowers, because such a credit outcome has an inverse relationship with the employment decisions of businesses. Additionally, the transmission of macroeconomic effects via the economic sentiment is investigated, which has a favorable impact on the firms’ employment growth.

Keywords: Information asymmetry; small business lending; credit rationing; employment; SAFE (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-031-96066-6_3

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DOI: 10.1007/978-3-031-96066-6_3

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