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Small and Medium Enterprises' Access to Finance: Evidence from Selected Asian Economies

Charles Harvie, Narjoko Dionisius and Sothea Oum ()
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Charles Harvie: School of Economics, Facutly of Commerce, University of Wollongong
Narjoko Dionisius: Economic Research Institute for ASEAN and East Asia (ERIA)

No DP-2013-23, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: This paper sheds light on the issue of SME financing in selected Asian economies using a unique sample survey. It elaborates on (i) the key sources of external finance for SMEs (ii) the extent to which, if at all, the SME sector as identified by firm size, country and in aggregate for a sample of countries in Asia is systematically disadvantaged, or rationed, with respect to access to external financing, (iii) the key factors contributing to the extent of this rationing, focusing upon firm characteristics, owner characteristics and firm performance, and (iv) the importance of financial rationing for SME performance. Our empirical results confirm the salient characteristics of successful SMEs with regard to accessing external funding, their ability to access multiple financial institutions and types of finance, and identifying potential credit rationing or risk premiums imposed by financial institutions on SMEs. The results also reveal how risk premiums affect the innovation capability and exporting activity of SMEs.

Keywords: small and medium enterprises (SMEs); external financing; rationing; firm characteristics; Asia. (search for similar items in EconPapers)
JEL-codes: G32 L22 (search for similar items in EconPapers)
Pages: 54 pages.
Date: 2013-10
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-cse, nep-cwa, nep-ent, nep-sbm and nep-sea
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