EconPapers    
Economics at your fingertips  
 

The Provision of Finance to Small Businesses: Does the Banking Relationship Constrain Performance

Christine T. Ennew and Martin R. Binks
Additional contact information
Christine T. Ennew: University Nottingham
Martin R. Binks: University Nottingham

Journal of Entrepreneurial Finance, 1995, vol. 4, issue 1, 57-73

Abstract: The beneficial economic effects of entrepreneurial activity can only be realised if such activity is relatively unconstrained in both product and factor markets, finance has been widely identified as a potential constraint on entrepreneurial activity due to either debt or equity gaps. However, in terms of externally supplied finance, it is arguably the availability of debt which is of greatest signifi­cance to most entrepreneurs. Given the inevitable information problems associated with the provision of debt finance, the nature of the relationship between bank and entrepreneur can be of considerable importance in ensuring the appropriate financing decisions are made. This paper examines the link between the banking relationship and the extent to which entrepreneurs are constrained by financing arrangements. Empirical analysis of the extent to which the banking relationship constrains performance suggests that there is no significant difference between more and less successful entrepreneurs.

Keywords: Banking; Finance; Small Business; Small Firms; Relationship Banking; Bank (search for similar items in EconPapers)
JEL-codes: G32 L25 G21 M13 (search for similar items in EconPapers)
Date: 1995
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://jefsite.org/RePEc/pep/journl/jef-1995-04-1-c-ennew.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pep:journl:v:4:y:1995:i:1:p:57-73

Access Statistics for this article

More articles in Journal of Entrepreneurial Finance from Pepperdine University, Graziadio School of Business and Management Contact information at EDIRC.
Series data maintained by Craig Everett ().

 
Page updated 2017-09-29
Handle: RePEc:pep:journl:v:4:y:1995:i:1:p:57-73