Access to Bank Credit and SME Financing (eBook)

Stefania P. S. Rossi is Professor of Economics at the University of Cagliari, Italy. She has been a postdoctoral visiting scholar at Stanford University, USA, an Economist at the World Bank, and a Professor at the University of Vienna, Austria. Her publications include many articles in the field of financial markets and banking.

Dedication 5
Foreword 7
Acknowledgements 13
Contents 15
Notes on Contributors 17
List of Figures 22
List of Tables 26
Part I: Credit Market Environment and SME Finance in Europe 30
1: Non-Bank Financing for Euro Area Companies During the Crisis 31
1.1 Introduction 31
1.2 Capital Structure of Euro Area Enterprises 33
1.3 Empirical Evidence on the Use of Non-Bank Sources of Finance 35
1.4 Econometric Analysis on the Determinants of the Usage of Non-Bank Financing Instruments 41
1.5 Robustness Checks 46
1.5.1 An Alternative Econometric Specification 46
1.5.2 Analysis of Sub-Components of the Indicator of Financial Constraints: Rejected Versus Discouraged Firms 48
1.6 Conclusions 50
References 53
2: Neither a Borrower Nor a Lender Be! Loan Application and Credit Decision for Young European Firms 57
2.1 Introduction 57
2.2 Theoretical Background and Hypotheses 60
2.3 Data and Methodology 62
2.3.1 Data 62
2.3.2 Methodology 63
2.3.3 Dependent Variables 64
2.3.4 Independent Variable 64
2.3.5 Controls 65
2.4 Descriptive Statistics 66
2.5 Results 69
2.5.1 Split Dataset 75
2.5.2 Robustness Checks 81
2.6 Discussion 82
Conclusion 83
References 85
3: Legal-Institutional Environment, Social Capital and the Cost of Bank Financing for SMEs: Evidence from the Euro Area 87
3.1 Introduction and Review of the Literature 87
3.2 Data and Methodology 90
3.2.1 Data 90
3.2.2 Dependent Variable 92
3.2.3 Empirical Methodology, Key Variables and Controls 92
3.3 Results 101
3.4 Conclusions 104
3.5 Appendix 105
References 107
4: Credit Access for Small Firms in the Euro Area: Does Gender Matter? 110
4.1 Introduction 110
4.2 Related Literature 112
4.3 Description of Data 116
4.3.1 The SAFE Survey 116
4.3.2 Characteristics of Female Firms in the Sample and Differences at Country Level 119
4.4 Access to Credit by Female Firms: Statistical Evidence 123
4.4.1 Financing the Firm 123
4.4.2 Availability of External Financing: Application and Results, Terms and Conditions 124
4.4.3 Differences at Country Level 128
4.5 Econometric Analysis 130
4.5.1 Baseline Specification 130
4.5.2 Differences at Country Level 137
4.5.3 Robustness Checks and Further Research 140
4.6 Conclusions 142
References 144
5: The Small Firm Financing Premium in Europe: Where and When Do Small Firms Pay the Most? 147
5.1 Introduction 147
5.2 Data and Aggregate Statistics 152
5.3 Correlates of the SFFP 158
5.3.1 Country Level 158
5.3.2 Bank Level Correlates of the SFFP 159
5.4 Cross-Country Variation in the Impact of Bank-Level Factors 167
5.5 Conclusion 171
References 172
6: Sovereign and Bank CDS Spreads During the European Debt Crisis: Laying the Foundation for SMEs’ Financial Distress 174
6.1 Introduction and the Literature 174
6.2 Data Description and Methodology 178
6.2.1 CDS Contracts 178
6.2.2 Dependent Variable: Bank CDSs 178
6.2.3 Key Variable: Sovereign CDSs 181
6.2.4 Unit Root Test 183
6.2.5 Control Variables and Methodology 184
6.3 Results 186
6.4 Conclusions 187
6.5 Appendix 188
6.6 References 195
7: SME Sources of Funding: More Capital or More Debt to Sustain Growth? An Empirical Analysis 198
7.1 Introduction 198
7.2 Backdrop and Relevant Literature 199
7.3 Sample: Construction and Representativeness 202
7.4 Variables and Methodology 208
7.5 Empirical Investigation and Discussion 211
7.6 Conclusion 220
References 222
Part II: SME Funding and the Role of Alternative Non-Bank Finance in Italy 225
8: SME Credit Access After Basel III. Does Size (and Quality) Matter? 226
8.1 Introduction 226
8.2 Regulation 230
8.3 Data 232
8.4 Methodology 235
8.5 Results 239
8.6 Conclusions 244
References 245
9: Credit Supply and Bank Interest Rates in the Italian Regions 248
9.1 Introduction 248
9.2 Data and Variables 250
9.3 Results 252
9.4 Conclusions 263
9.5 Appendix A 265
9.6 Appendix B: Regression model 271
References 278
10: Corporate Bonds for SMEs: A Study of Italian Minibonds 279
10.1 Introduction 279
10.2 Sample Description 280
10.3 Analysis of Performance 290
10.4 Results 293
10.5 Conclusions 296
10.6 Appendix 297
References 307
11: Using Open-End Mutual Fund Resources to Finance SMEs: The Potential Market Share of ELTIFs 308
11.1 Introduction 308
11.2 The Italian Asset Management Sector: Dimensions and Structure 310
11.3 ELTIFs: New Instruments for SME Financing 316
11.4 Italian Open-End Mutual Funds Supplied by Italian Investment Firms: A Descriptive Analysis 320
11.5 Final Considerations 329
References 331
Index 333