Opportunities and limitations of public equity markets for SMEs

Iota Kaousar Nassr and Gert Wehinger

OECD Journal: Financial Market Trends, 2016, vol. 2015, issue 1, 49-84

Abstract: This article on public equity financing for small and medium-sized enterprises (SMEs) complements earlier OECD work on market-based finance for SMEs. The development of this market segment could promote investment in SMEs and, together with securitisation and other non-bank debt financing instruments, encourage an enhanced allocation of risk and risk taking, and thus support growth. Despite the benefits of public SME equity, its share is small and an equity gap exists for risk financing more generally. A number of important impediments to the wider use of public equities for SMEs are identified, such as admission cost and listing requirements, lack of liquidity, educational gaps, limited ecosystems, and tax treatment, all of which require attention by regulators and policy makers alike.

Keywords: SME finance; market-based finance; SME public equity markets; growth markets; small caps; initial public offering (IPO); exchanges; risk capital; small equity offering (search for similar items in EconPapers)
JEL-codes: G1 G2 G23 G28 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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