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Perceived credit constraints in the European Union

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  • Erik Canton

    ()

  • Isabel Grilo

    ()

  • Josefa Monteagudo

    ()

  • Peter Zwan

    ()

Abstract

The promotion and support of small and medium-sized enterprises (SMEs) is an essential component of policies designed to help improve Europe’s economic performance. A crucial issue is whether SMEs face difficulty obtaining bank loans. Using pre-crisis survey data from 2005 and 2006 for nearly 3,500 SMEs (firms with fewer than 250 employees) in the European Union (EU), we investigate the determinants of perceived bank loan accessibility at the firm level and at the country level. Based on hierarchical (multi-level) binomial logit regressions, our findings show that the youngest and smallest SMEs have the worst perception of access to bank loans. The SMEs in nations with concentrated banking sectors are more positive about loan accessibility. In addition, a high fraction of foreign-owned banks is associated with improved perception of loan accessibility in the EU 15 but not in the EU 10. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Erik Canton & Isabel Grilo & Josefa Monteagudo & Peter Zwan, 2013. "Perceived credit constraints in the European Union," Small Business Economics, Springer, vol. 41(3), pages 701-715, October.
  • Handle: RePEc:kap:sbusec:v:41:y:2013:i:3:p:701-715
    DOI: 10.1007/s11187-012-9451-y
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Peter van der Zwan, 2014. "Bank loan application success by SMEs: the role of ownership structure and innovation," Scales Research Reports H201404, EIM Business and Policy Research.
    2. Moder, Isabella & Bonifai, Niccolò, 2017. "Access to finance in the Western Balkans," Occasional Paper Series 197, European Central Bank.
    3. Arráiz,Irani & Bruhn,Miriam & Stucchi,Rodolfo Mario, 2015. "Psychometrics as a tool to improve screening and access to credit," Policy Research Working Paper Series 7506, The World Bank.
    4. Brown, Ross & Lee, Neil, 2014. "Funding issues confronting high growth SMEs in the UK," LSE Research Online Documents on Economics 57264, London School of Economics and Political Science, LSE Library.
    5. Isabel Busom & Beatriz Corchuelo & Ester Martínez-Ros, 2014. "Tax incentives… or subsidies for business R&D?," Small Business Economics, Springer, vol. 43(3), pages 571-596, October.
    6. Edward Lorenz & Sophie Pommet, 2017. "Innovation, Credit Constraints and National Banking Systems: A Comparison of Developing Nations," GREDEG Working Papers 2017-16, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    7. Mac an Bhaird, Ciarán & Vidal, Javier Sanchez & Lucey, Brian, 2016. "Discouraged borrowers: Evidence for Eurozone SMEs," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 44(C), pages 46-55.
    8. Jaroslav BELAS & Yuriy BILAN & Aleksandr Kljucnikov & Zuzana Vincurova & Jiri Machacek, 2015. "Actual Problems Of Business Risk In Sme Segment. Case Study From Slovakia," International Journal of Entrepreneurial Knowledge, VSP Ostrava, a. s., vol. 3(1), pages 46-56, June.
    9. Daisuke Tsuruta, 2015. "Leverage and firm performance of small businesses: evidence from Japan," Small Business Economics, Springer, vol. 44(2), pages 385-410, February.
    10. Mukasa Adamon N. & Anthony M. Simpasa & Adeleke Oluwole Salami, 2017. "Working Paper 247 - Credit constraints and farm productivity: Micro-level evidence from smallholder farmers in Ethiopia," Working Paper Series 2356, African Development Bank.
    11. Petr Korab, 2016. "Access to Credit and Unconventional Monetary policy in the Eurozone after the Financial Crisis," MENDELU Working Papers in Business and Economics 2016-68, Mendel University in Brno, Faculty of Business and Economics.
    12. Ciani, Andrea & Bartoli, Francesca, 2015. "Export quality upgrading under credit constraints," DICE Discussion Papers 191, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

    More about this item

    Keywords

    Bank loans; Money supply; SMEs; Credit constraints; Concentration index; Multi-level; E44; E51; G15; G21;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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