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Small Business Economics

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09.04.2019

Small firms and bank financing in bad times

verfasst von: Giulio Cainelli, Valentina Giannini, Donato Iacobucci

Erschienen in: Small Business Economics | Ausgabe 4/2020

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Abstract

This paper aims to analyze access to bank financing by small firms belonging to business groups compared to independent firms. We consider Italian manufacturing firms during the severe credit-crunch during 2010–2012 caused by the financial crisis and subsequent domestic recession. We expect belonging to a business group to facilitate access to bank financing as the result of two different mechanisms: (i) the implicit guarantee provided by group belonging (affiliation effect) and (ii) the transfer of resources via the internal capital market (portfolio effect). The empirical evidence confirms our hypotheses. Belonging to a business group facilitates access to bank financing, while the presence of an internal capital market, which substitutes for both the decision to obtain bank financing and the amount borrowed, makes firms that are part of a business group less dependent than independent firms on this type of financing.

Vorheriger Artikel Capital structure, debt maturity, and financial crisis: empirical evidence from SMEs

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Titel: Small firms and bank financing in bad times
verfasst von: Giulio Cainelli
Valentina Giannini
Donato Iacobucci
Publikationsdatum: 09.04.2019
Verlag: Springer US
Erschienen in: Small Business Economics / Ausgabe 4/2020
Print ISSN: 0921-898X
Elektronische ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-019-00164-7

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