The 2008–2009 global financial crisis and the cost of debt capital among SMEs: Swedish evidence

Darush Yazdanfar and Peter Öhman

Journal of Economic Studies, 2020, vol. 48, issue 6, 1097-1110

Abstract: Purpose - The main purpose of this study is to describe and analyse the relationship between the 2008–2009 global financial crisis and small and medium-sized enterprises' cost of debt capital. Design/methodology/approach - Statistical methods, including multiple OLS and dynamic panel data, were used to analyse a longitudinal cross-sectional panel dataset of 3865 Swedish SMEs operating in five industry sectors over the 2008–2015 period. Findings - The results suggest that the cost of debt was influenced by the financial crisis and another macroeconomic factor, i.e. the interbank interest rate, and by firm-specific factors such as firm size and lagged cost of debt. Originality/value - To the authors' best knowledge, this is one of few studies to examine the cost of debt among SMEs during the crisis and post-crisis periods using data from a large-scale, longitudinal, cross-sectional database.

Keywords: Cost of debt; Global financial crisis; SMEs; Cross-sectional sample; Dynamic panel-data approach (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jespps:jes-02-2020-0064

DOI: 10.1108/JES-02-2020-0064

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