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Bank Financing for SMEs: Evidence Across Countries and Bank Ownership Types

Author

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  • Thorsten Beck
  • Asli Demirgüç-Kunt
  • María Pería

Abstract

Using data for 91 large banks from 45 countries, this paper finds few differences in the extent, type, and pricing of SME loans across foreign, private, and government-owned banks, even though different bank ownership types apply different lending technologies and have different organizational structures. Instead, we find significant differences across banks in developed and developing countries, driven by differences in the economic, institutional, and legal environment, as opposed to by differences in lending technologies and organizational structures. Finally, the link between lending technologies, organizational structures, and SME financing is not consistent with the conventional view that SME lending is based on “relationship lending”.
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Suggested Citation

  • Thorsten Beck & Asli Demirgüç-Kunt & María Pería, 2011. "Bank Financing for SMEs: Evidence Across Countries and Bank Ownership Types," Journal of Financial Services Research, Springer;Western Finance Association, vol. 39(1), pages 35-54, April.
    • Handle: RePEc:kap:jfsres:v:39:y:2011:i:1:p:35-54
    DOI: 10.1007/s10693-010-0085-4
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    More about this item

    Keywords

    Bank financing; Small and medium-sized enterprises; Small and medium-size enterprises; Business environment; Financing constraints; Lending techniques; G21; G30;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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