SMEs’ Access to Finance in the Euro Area : What Helps or Hampers?

Author/Editor:

Bahar Öztürk ; Mico Mrkaic

Publication Date:

May 9, 2014

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The monetary transmission mechanism in the euro area has been adversely affected by the recent crises. Using survey data on thousands of euro area firms, we study factors that affect the access to finance of SMEs. We find that changes in bank funding costs and borrower leverage matter for firms’ access to finance. Increases in bank funding costs and borrowers’ debt-to-asset ratios are significantly and negatively associated with firms’ access to finance. The use of subsidies significantly improve access to finance of SMEs. Finally, access to finance is found to be positively related to firm size and firm age.

Series:

Working Paper No. 14/78

Subject:

English

Publication Date:

May 9, 2014

ISBN/ISSN:

9781484379059/1018-5941

Stock No:

WPIEA2014078

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

30

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