SME Financing in Emerging Markets: Firm Characteristics, Banking Structure and Institutions

Yan Dong () and Chao Men

Emerging Markets Finance and Trade, 2014, vol. 50, issue 1, 120-149

Abstract: Using the World Bank Enterprise Survey indicator database, we investigate (1) how firm characteristics affect financing of small and medium-size enterprises (SMEs) in emerging markets; (2) how cross-country differences in the banking sector affect SME financing; and (3) how financing of SMEs is influenced by economic development and institutions. Our findings confirm that younger and smaller firms in nonmanufacturing sectors consistently face severe financing obstacles/constraints and rely heavily on internal financing. Moreover, the availability of credit information and the bank concentration ratio, as well as economic development and the institutional environment, can significantly affect SME financing, and access to external financing in particular.

Keywords: emerging market; financial obstacles; SMEs (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (31)

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