Funding growth and innovation in Austria – financing conditions for SMEs and start-ups

Helmut Gassler (), Wolfgang Pointner () and Doris Ritzberger-Grünwald ()
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Wolfgang Pointner: Oesterreichische Nationalbank
Doris Ritzberger-Grünwald: Oesterreichische Nationalbank, http://www.oenb.at

Financial Stability Report, 2018, issue 36, 56-72

Abstract: In Austria, like in most European countries, small and medium-sized enterprises (SMEs) rely on bank funding as their primary source of external finance. Using ECB survey data, we analyze the availability of bank credit for SMEs in Austria in comparison to SMEs in the euro area. Overall, we find that bank lending has been rather stable over the past few years, and the lending conditions did not discourage many potential borrowers. Creditors and investors treat small, young firms that engage in innovation differently due to their elevated risk profile and the high share of intangible capital in their assets. We discuss the financial life cycle of these start-ups and the appropriate funding in each stage, including policy actions that have been taken to encourage a favorable ecosystem for start-ups in Austria. Whereas public support for these firms is well established, the private market for venture capital is rather small in Austria, especially in comparison with European innovation leaders.

Keywords: corporate funding; small and medium-sized enterprises; start-ups; innovations (search for similar items in EconPapers)
JEL-codes: G24 H81 O3 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbfs:y:2018:i:36:b:3

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