Abstract

http://ssrn.com/abstract=1677453
 


 



Access to Bank Financing and New Investment: Evidence from Europe


Larry W. Chavis


University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Leora F. Klapper


World Bank; World Bank - Development Research Group (DECRG)

Inessa Love


World Bank - Development Economics Data Group (DECDG)

April 10, 2010

THE ECONOMICS OF SMALL BUSINESSES: AN INTERNATIONAL PERSPECTIVE, Giorgio Calcagnini and Ilario Favaretto, eds., Springer Publishing, 2010

Abstract:     
In this paper we study the relationship between firm age, the use of external finance and new investment decisions, in a sample of European firms. We find that younger firms use less bank financing than older firms only in non-EU countries, suggesting that greater financial development and a stronger investment climate offers young firms greater access to bank financing. Next, we show a link between a firm’s ability to obtain a loan and make new investments. Furthermore, we find that firms that report a need for credit, but did not apply for a loan, have the lowest incidence and amount of investment. Our results highlight the important role that the business environment can play in supporting wider access to external finance and greater private sector investment.

Number of Pages in PDF File: 25

Keywords: Access to Finance, Debt Market, Banks & Banking Reform, Financial Intermediation

JEL Classification: G32, H32, O16

Accepted Paper Series


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Date posted: September 28, 2010  

Suggested Citation

Chavis, Larry W. and Klapper, Leora F. and Love, Inessa, Access to Bank Financing and New Investment: Evidence from Europe (April 10, 2010). THE ECONOMICS OF SMALL BUSINESSES: AN INTERNATIONAL PERSPECTIVE, Giorgio Calcagnini and Ilario Favaretto, eds., Springer Publishing, 2010. Available at SSRN: http://ssrn.com/abstract=1677453

Contact Information

Larry W. Chavis (Contact Author)
University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )
McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-8215 (Phone)
919-962-7186 (Fax)
HOME PAGE: http://www.unc.edu/~chavisl

Leora F. Klapper
World Bank ( email )
1818 H Street, N.W.
Washington, DC 20433
United States
202-473-8738 (Phone)
HOME PAGE: http://econ.worldbank.org/staff/lklapper
World Bank - Development Research Group (DECRG)
1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
Inessa Love
World Bank - Development Economics Data Group (DECDG) ( email )
1818 H Street, N.W.
Washington, DC 20433
United States
HOME PAGE: http://econ.worldbank.org/staff/ilove
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