Economic and institutional determinants of lease financing for European SMEs: An analysis across developing and developed countries

Abstract

In light of an economic recession at a global scale, we should turn our attention toward sources of funding which, as leasing, present clear advantages to the more vulnerable small and medium-sized enterprises (SMEs). Applying logistic models on a sample of 4,425 SMEs from 25 European countries, we show that financial constraints and the characteristics of the institutional environment might play a distinctive role in the use of leasing for SMEs across developing and developed countries. Consequently, leasing regulations should be carefully studied to trigger rather than sink the feasibility with which leasing might be deployed and used.