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Institutions, Financial Development, and Small Business Survival: Evidence from European Emerging Markets

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  • Ichiro Iwasaki
  • Evžen Kocenda
  • Yoshisada Shida

Abstract

In this paper, we traced the survival status of 94,401 small businesses in 17 European emerging markets from 2007–2017 and empirically examined the determinants of their survival, focusing on institutional quality and financial development. We found that institutional quality and the level of financial development exhibit statistically significant and economically meaningful impacts on the survival probability of the SMEs being researched. The evidence holds even when we control for a set of firm-level characteristics such as ownership structure, financial performance, firm size, and age. The findings are also uniform across industries and country groups and robust beyond the difference in assumption of hazard distribution, firm size, region, and time period.

Suggested Citation

  • Ichiro Iwasaki & Evžen Kocenda & Yoshisada Shida, 2020. "Institutions, Financial Development, and Small Business Survival: Evidence from European Emerging Markets," CESifo Working Paper Series 8641, CESifo.
    • Handle: RePEc:ces:ceswps:_8641
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    More about this item

    Keywords

    small business; institutions; financial development; survival analysis; European emerging markets;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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