Financing Patterns of European SMEs – An Empirical Taxonomy

46 Pages Posted: 22 Nov 2015

See all articles by Alexandra Moritz

Alexandra Moritz

University of Trier - Faculty of Management

Jorn H. Block

University of Trier - Faculty of Management; Erasmus University Rotterdam (EUR) - Institute of Management (ERIM)

Andreas Heinz

Universite du Luxembourg

Date Written: October 24, 2015

Abstract

This paper takes a holistic approach to investigate SME financing patterns in Europe by performing a cluster analysis including 12,726 SMEs in 28 European countries. The results reveal that SME financing in Europe is not homogenous but that different financing patterns exist. The cluster analysis identifies six distinct SME financing types: mixed-financed SMEs, state-subsidized SMEs, debt-financed SMEs, flexible-debt-financed SMEs, trade-financed SMEs and internally-financed SMEs. These SME financing types differ according to the number of financing instruments used and the combinations thereof. Furthermore, the SME financing types can be profiled according to their firm-, product-, industry- and country-specific characteristics. Our findings can support policy makers in assessing the impact of policy changes on SME financing and in designing financing programs tailored to the specific needs of SMEs.

Keywords: SME financing in Europe, financing patterns, empirical taxonomy, cluster analysis

Suggested Citation

Moritz, Alexandra and Block, Jorn Hendrich and Heinz, Andreas, Financing Patterns of European SMEs – An Empirical Taxonomy (October 24, 2015). Available at SSRN: https://ssrn.com/abstract=2693564 or http://dx.doi.org/10.2139/ssrn.2693564

Alexandra Moritz (Contact Author)

University of Trier - Faculty of Management ( email )

Germany

Jorn Hendrich Block

University of Trier - Faculty of Management ( email )

D-54296
Germany

Erasmus University Rotterdam (EUR) - Institute of Management (ERIM) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Andreas Heinz

Universite du Luxembourg ( email )

L-1511 Luxembourg
Luxembourg

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