European SMEs' growth: the role of market-based finance and public financial support: European SMEs' growth: the role of market-based finance and public financial support: Boccaletti et al.
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| Authors: | Boccaletti, Simone1 (AUTHOR) simone.boccaletti@unimib.it, Ferrando, Annalisa2 (AUTHOR) annalisa.ferrando@ecb.europa.eu, Rossi, Emanuele3 (AUTHOR) emanuele.rossi@unimib.it, Rossolini, Monica3 (AUTHOR) monica.rossolini@unimib.it |
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| Source: | Small Business Economics. Feb2025, Vol. 64 Issue 2, p691-727. 37p. |
| Subject Terms: | *Public finance, *Small business, *Financial aid, *Government policy, Public support |
| Abstract: | The study investigates the role of market-based finance and public financial support in aiding scaling up by European SMEs. First, we analyse the impact of public loan guarantee schemes on firms' access to market-based instruments. Second, we study whether firms' access to market-based finance and the use of public grants boost a firm's (ex post) growth. The analysis is based on a unique and original dataset of about 31,000 Eurozone firms in the 2009–2020 period. The study finds that firms' access to market-based finance is (i) driven positively by the previous use of public financial support schemes and (ii) has a positive effect on subsequent growth. In particular, SMEs display relatively higher growth in fixed assets, while for large firms, growth is mainly driven by current assets. Moreover, SME issuers using public grants achieve significantly stronger growth than comparable firms. Plain English Summary: Improving access to market-based finance and public financial support schemes facilitates the scaling up of European SMEs. Public grants enable SMEs to access market-based finance and their subsequent growth. We analyse about 31,000 Eurozone non-financial firms in the period 2009–2020, for which we have information on firms' market-based finance access and their use of public grants. We demonstrate that the joint role of market-based finance and public financial support helps European SMEs scale up. The firms' access to market-based finance is driven positively by the previous use of public financial support schemes and considerably affects subsequent firms' growth. Deepening our analysis, grants-backed SMEs and more informationally opaque firms achieve significantly more robust growth when they issue new equity and bonds than comparable non-grants-backed firms. In sum, our research findings suggest that policymakers should consider all these aspects when establishing their public support policies since adequate access to external market-based finance for SMEs' investments is a crucial factor for the prosperity of SMEs and economic growth. [ABSTRACT FROM AUTHOR] |
| Database: | Entrepreneurial Studies Source |
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| Header | DbId: ent DbLabel: Entrepreneurial Studies Source An: 183284322 AccessLevel: 6 PubType: Academic Journal PubTypeId: academicJournal PreciseRelevancyScore: 0 |
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| Items | – Name: Author Label: Authors Group: Au Data: <searchLink fieldCode="AR" term="%22Boccaletti%2C+Simone%22">Boccaletti, Simone</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> simone.boccaletti@unimib.it</i><br /><searchLink fieldCode="AR" term="%22Ferrando%2C+Annalisa%22">Ferrando, Annalisa</searchLink><relatesTo>2</relatesTo> (AUTHOR)<i> annalisa.ferrando@ecb.europa.eu</i><br /><searchLink fieldCode="AR" term="%22Rossi%2C+Emanuele%22">Rossi, Emanuele</searchLink><relatesTo>3</relatesTo> (AUTHOR)<i> emanuele.rossi@unimib.it</i><br /><searchLink fieldCode="AR" term="%22Rossolini%2C+Monica%22">Rossolini, Monica</searchLink><relatesTo>3</relatesTo> (AUTHOR)<i> monica.rossolini@unimib.it</i> – Name: TitleSource Label: Source Group: Src Data: <searchLink fieldCode="JN" term="%22Small+Business+Economics%22">Small Business Economics</searchLink>. Feb2025, Vol. 64 Issue 2, p691-727. 37p. – Name: Subject Label: Subject Terms Group: Su Data: *<searchLink fieldCode="DE" term="%22Public+finance%22">Public finance</searchLink><br />*<searchLink fieldCode="DE" term="%22Small+business%22">Small business</searchLink><br />*<searchLink fieldCode="DE" term="%22Financial+aid%22">Financial aid</searchLink><br />*<searchLink fieldCode="DE" term="%22Government+policy%22">Government policy</searchLink><br /><searchLink fieldCode="DE" term="%22Public+support%22">Public support</searchLink> – Name: Abstract Label: Abstract Group: Ab Data: The study investigates the role of market-based finance and public financial support in aiding scaling up by European SMEs. First, we analyse the impact of public loan guarantee schemes on firms' access to market-based instruments. Second, we study whether firms' access to market-based finance and the use of public grants boost a firm's (ex post) growth. The analysis is based on a unique and original dataset of about 31,000 Eurozone firms in the 2009–2020 period. The study finds that firms' access to market-based finance is (i) driven positively by the previous use of public financial support schemes and (ii) has a positive effect on subsequent growth. In particular, SMEs display relatively higher growth in fixed assets, while for large firms, growth is mainly driven by current assets. Moreover, SME issuers using public grants achieve significantly stronger growth than comparable firms. Plain English Summary: Improving access to market-based finance and public financial support schemes facilitates the scaling up of European SMEs. Public grants enable SMEs to access market-based finance and their subsequent growth. We analyse about 31,000 Eurozone non-financial firms in the period 2009–2020, for which we have information on firms' market-based finance access and their use of public grants. We demonstrate that the joint role of market-based finance and public financial support helps European SMEs scale up. The firms' access to market-based finance is driven positively by the previous use of public financial support schemes and considerably affects subsequent firms' growth. Deepening our analysis, grants-backed SMEs and more informationally opaque firms achieve significantly more robust growth when they issue new equity and bonds than comparable non-grants-backed firms. In sum, our research findings suggest that policymakers should consider all these aspects when establishing their public support policies since adequate access to external market-based finance for SMEs' investments is a crucial factor for the prosperity of SMEs and economic growth. [ABSTRACT FROM AUTHOR] |
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| RecordInfo | BibRecord: BibEntity: Identifiers: – Type: doi Value: 10.1007/s11187-024-00918-y Languages: – Code: eng Text: English PhysicalDescription: Pagination: PageCount: 37 StartPage: 691 Subjects: – SubjectFull: Public finance Type: general – SubjectFull: Small business Type: general – SubjectFull: Financial aid Type: general – SubjectFull: Government policy Type: general – SubjectFull: Public support Type: general Titles: – TitleFull: European SMEs' growth: the role of market-based finance and public financial support: European SMEs' growth: the role of market-based finance and public financial support: Boccaletti et al. Type: main BibRelationships: HasContributorRelationships: – PersonEntity: Name: NameFull: Boccaletti, Simone – PersonEntity: Name: NameFull: Ferrando, Annalisa – PersonEntity: Name: NameFull: Rossi, Emanuele – PersonEntity: Name: NameFull: Rossolini, Monica IsPartOfRelationships: – BibEntity: Dates: – D: 01 M: 02 Text: Feb2025 Type: published Y: 2025 Identifiers: – Type: issn-print Value: 0921898X Numbering: – Type: volume Value: 64 – Type: issue Value: 2 Titles: – TitleFull: Small Business Economics Type: main |
| ResultId | 1 |
