The Financial Structure of Italian Start-Ups, in Good and Bad Times
40 Pages Posted: 9 Jul 2019
Date Written: July 20, 2018
We analyse the financing sources of over 360,000 Italian start-ups registered between 2003 and 2010. The data show that, before the Global Financial Crisis, 50 per cent of start-ups borrowed from banks when they were one year old, and that bank loans covered 16 per cent of total assets on average. In the post-crisis period we find that the frequency of borrowing by one-year-old start-ups declines by 5 percentage points, and the difference does not disappear as firms become older. We also document that the post-crisis decline in borrowing from banks is more marked than that observed for older firms, controlling for business characteristics.
Keywords: start-ups, corporate finance, financial constraints
JEL Classification: D22, G32
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