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SME access to market-based finance across Eurozone countries

Paola Bongini (), Annalisa Ferrando (), Emanuele Rossi () and Monica Rossolini ()
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Paola Bongini: University of Milano-Bicocca
Annalisa Ferrando: European Central Bank
Emanuele Rossi: University of Milano-Bicocca
Monica Rossolini: University of Milano-Bicocca

Small Business Economics, 2021, vol. 56, issue 4, No 21, 1667-1697

Abstract: Abstract This paper provides an in-depth analysis of small and medium enterprise (SME) access to capital markets across Eurozone countries. First, we determine which factors—at firm and country level—influence the likelihood of SME access to market-based finance. Second, we construct an index of market suitability to indicate the percentage of firms potentially fit for market-based finance. Our results suggest that while several Eurozone countries have realised SMEs’ ‘potential’ for capital market financing, a large number of firms fit for market-based finance remain unexploited. We also find that overall business conditions—measured by GDP growth, the development degree of domestic financial markets and the quality of the legal and judicial enforcement system—considerably influence a firm’s market suitability. In the studied period (2009–2014), macro-economic and institutional factors tended to reduce the likelihood of SMEs accessing market-based finance in most countries in our sample.

Keywords: Market-based finance; SME financing; Eurozone; Capital markets union; G10; G23; G32 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s11187-019-00285-z

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