Do foreign banks intensify borrower discouragement? The role of developed European institutions in ameliorating SME financing constraints

Please use this identifier to cite or link to this item: http://hdl.handle.net/10045/101313
Información del item - Informació de l'item - Item information
Title: Do foreign banks intensify borrower discouragement? The role of developed European institutions in ameliorating SME financing constraints
Authors: Mol-Gómez-Vázquez, Ana | Hernández-Cánovas, Ginés | Koëter-Kant, Johanna
Center, Department or Service: Universidad de Alicante. Departamento de Economía Financiera y Contabilidad
Keywords: Borrower discouragement | Financing constraints | Foreign banks | Institutional development | Small business lending
Knowledge Area: Economía Financiera y Contabilidad
Issue Date: 1-Feb-2020
Publisher: SAGE Publications
Citation: International Small Business Journal: Researching Entrepreneurship. 2020, 38(1): 3-20. doi:10.1177/0266242619868231
Abstract: The growing activity of foreign banks in most European countries may increase financing constraints by intensifying the problem of borrower discouragement. We provide new evidence of this association by analysing a sample of small and medium-sized enterprises (SMEs) operating in 25 developed and developing European countries. We find that financing constraints increase with foreign banks for those SMEs operating in countries where the share of banking assets owned by foreign banks is above 34%. Our results also show that borrower discouragement may decrease, or increase less, with the presence of foreign banks for SMEs operating in countries with high income, with cheap debt enforcement mechanisms, or having a private bureau that provides credit information about firms and individuals. These results suggest that unification towards better institutions needs to occur in Europe before the banking union progresses to a more open banking system.
Sponsor: Ana Mol-Gómez-Vázquez and Ginés Hernández-Cánovas acknowledge financial support by Santander Financial Institute (SANFI) and Fundación UCEIF.
URI: http://hdl.handle.net/10045/101313
ISSN: 0266-2426 (Print) | 1741-2870 (Online)
DOI: 10.1177/0266242619868231
Language: eng
Type: info:eu-repo/semantics/article
Rights: © The Author(s) 2019
Peer Review: si
Publisher version: https://doi.org/10.1177/0266242619868231
Appears in Collections:Personal Investigador sin Adscripción a Grupo

Files in This Item:
Files in This Item:
File Description SizeFormat 
Thumbnail2020_Mol-Gomez-Vazquez_etal_ISBJ_final.pdfVersión final (acceso restringido)156,26 kBAdobe PDFOpen    Request a copy
Thumbnail2020_Mol-Gomez-Vazquez_etal_ISBJ_postprint.pdfPost-print (acceso abierto)228,64 kBAdobe PDFOpen Preview


Items in RUA are protected by copyright, with all rights reserved, unless otherwise indicated.