Euro Area SMEs Under Financial Constraints: Belief or Reality?

34 Pages Posted: 1 Dec 2011

See all articles by Concha Artola

Concha Artola

Banco de España - Servicio de Estudios

Veronique Genre

European Central Bank (ECB)

Date Written: November 30, 2011

Abstract

During the recent financial crisis, euro area firms, and especially Small and Medium-sized Enterprises, have been reporting acute problems of access to external finance. Using firm-level replies to the SME survey on access to finance, we use two indicators of financing constraints based on perceptions on the one side and on experienced financing constraints on the other and run probit and multinomial regressions model to determine which firms’, sectoral or national characteristics drove perceptions and experienced financial constraints during the recent financial turmoil. We find that perceptions of financing crunch was broadly based across firms but those firms who really experienced a credit crunch tended to be small and young, confirming the fact that SMEs tend to suffer more when credit standards are tightened.

Keywords: financial crisis, financing constraints, credit rationing, small and medium-sized enterprises, survey data

JEL Classification: E220, G300, L110, O160

Suggested Citation

Artola, Concha and Genre, Veronique, Euro Area SMEs Under Financial Constraints: Belief or Reality? (November 30, 2011). CESifo Working Paper Series No. 3650, Available at SSRN: https://ssrn.com/abstract=1966955

Concha Artola (Contact Author)

Banco de España - Servicio de Estudios ( email )

28027 Madrid
Spain
(34) 91-338-5127 (Phone)
(34) 91-338-6041 (Fax)

Veronique Genre

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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