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Financing and obstacles for high growth enterprises: The European case

Annalisa Ferrando, Rozalia Pal and Elena Durante

No 2019/03, EIB Working Papers from European Investment Bank (EIB)

Abstract: This paper investigates the links between alternative growth phases of firms and barriers to financing and investment using firm-level information for a representative sample of EU companies. We propose a novel classification of corporates: high growth (HGEs), stable and declining enterprises. We find that during the phase of high growth, firms are on average more financially constrained. To match their needs for external finance, HGEs are more likely to apply for equity financing. Furthermore, we identify firms with high growth potential. Using survey data, we investigate the barriers to investment activities faced by actual and potential HGEs. Our findings suggest that the most stringent obstacles for actual HGEs are the availability of skilled staff and business regulations, while potential HGEs are blocked by uncertainty about the future.

Keywords: high growth enterprises; financing conditions; bank financing; equity financing; obstacles to investment (search for similar items in EconPapers)
JEL-codes: D22 G01 G20 G32 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-eur, nep-fdg and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:eibwps:201903

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