European Financial Integration and the Financing of Local Businesses in the New EU Member States

EBRD Working Paper No. 89

52 Pages Posted: 10 Dec 2004

See all articles by Ulrich Volz

Ulrich Volz

University of London - School of Oriental and African Studies (SOAS) - Economics; Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE)

Date Written: November 2004

Abstract

This paper explores the degree of financial market integration between the new and old EU member states. It also considers the likely effects of the ongoing integration process on the new members' financial sectors. In particular, the paper discusses the implications of the high concentration of financial services and the dominance of foreign-owned institutions for the provision of financial services to small and medium-sized enterprises (SMEs) in the ten accession countries. Using enterprise data on 2,427 firms, the paper finds that access to finance still constitutes a major problem for business development and that financing conditions are considerably more difficult for SMEs than for larger entities.

Keywords: Financial integration, large and foreign banks, banking competition, SME finance

JEL Classification: G21, G3, O16, P34

Suggested Citation

Volz, Ulrich, European Financial Integration and the Financing of Local Businesses in the New EU Member States (November 2004). EBRD Working Paper No. 89. Available at SSRN: https://ssrn.com/abstract=627961 or http://dx.doi.org/10.2139/ssrn.627961

Ulrich Volz (Contact Author)

University of London - School of Oriental and African Studies (SOAS) - Economics

London, WC1E 7HU
United Kingdom

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE) ( email )

Tulpenfeld 4
Bonn, 53113
Germany

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