Economics, Econometrics and Finance
4 years ago

Small firms struggle to access bank finance in countries with poor institutions.

RePEc: Research Papers in Economics
Financing patterns around the world: Are small firms different?
Thorsten Beck, Aslı Demirgüç-Kunt, Vojislav Maksimovic

Paper Summary

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The study looked at how different types of businesses get money in different countries. They found that small businesses and businesses in places with weak rules use less money from banks. When property rights are protected, small businesses get more bank money. Small businesses don't rely more on leasing or trade money than big businesses. Big businesses can get more money from outside sources when they need it, compared to small businesses. The order in which businesses get money stays the same in different countries.