PA LG R AV E M AC M I L L A N S T U D I E S I N BANKING AND FINANCIAL INSTITUTIONS S E R I E S E D I TO R : P H I L I P M O LY N E U X Access to Bank Credit and SME Financing Edited by Stefania Patrizia Sonia Rossi www.ebook3000.com Palgrave Macmillan Studies in Banking and Financial Institutions Series Editor Philip Molyneux Bangor University United Kingdom Aim of the series The Palgrave Macmillan Studies in Banking and Financial Institutions series is international in orientation and includes studies of banking systems in particular countries or regions as well as contemporary themes such as Islamic Banking, Financial Exclusion, Mergers and Acquisitions, Risk Management, and IT in Banking The books focus on research and practice and include up to date and innovative studies that cover issues which impact banking systems globally More information about this series at http://www.springer.com/series/14678 www.ebook3000.com Stefania Patrizia Sonia Rossi Editor Access to Bank Credit and SME Financing Editor Stefania Patrizia Sonia Rossi Department of Economics and Business University of Cagliari Italy Palgrave Macmillan Studies in Banking and Financial Institutions ISBN 978-3-319-41362-4    ISBN 978-3-319-41363-1 (eBook) DOI 10.1007/978-3-319-41363-1 Library of Congress Control Number: 2016957875 © The Editor(s) (if applicable) and The Author(s) 2017 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and ­transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made Cover image © Shotshop GmbH / Alamy Stock Photo Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is Gewerbestrasse 11, 6330 Cham, Switzerland www.ebook3000.com For my mother, brilliant mind, source of strength and inspiration Stefania Foreword Following the global financial and European sovereign debt crises, liquidity shortage and heavy restrictions on bank financing have worsened conditions in credit markets for non-financial firms in Europe Given their importance as drivers of employment, growth, and innovation in the European economy, easy access to credit becomes crucial especially for small- and medium-sized enterprises (SMEs), which dominate the business landscape in Europe and rely heavily on bank financing The difficulties in accessing and obtaining a bank loan appear even more severe in the stressed countries that are struggling with the negative consequences of the financial crisis due to their macroeconomic weaknesses and financial fragility Such distress increases the likelihood of credit crunch phenomena—as banks tend to transfer the stress to the borrowers—which, in turn, affect access and cost of funding for enterprises These issues were discussed by leading scholars in the field at the international workshop ‘Access to Bank Credit and SME Financing’, held in Pula, Sardinia, on 10 October 2015 This book collects some of the papers presented at the workshop and is organised into two parts The first part, Credit Market Environment and SME Finance in Europe, focuses on the issue of viability in credit access and on the financing difficulties encountered by SMEs It is widely accepted in the literature that SMEs pay more for bank financing than larger firms because of the SME’s peculiarities, such as higher observed default rates and more vii www.ebook3000.com viii Foreword e­ xposure to idiosyncratic risk, stronger reliance on the domestic economy, a narrower set of available financing options, intrinsic lack of ability to produce high-quality collateral, and lack of transparency related to their creditworthiness In addition to these features, the structure of the credit market, the fragility of the banking system, the sovereign debt crisis, and the social, institutional, and legal framework all seem to play a role, widely recognized in the literature, in affecting SME access to credit The chapters collected in this part investigate the abovementioned issues using different perspectives and methodological strategies and provide state-of-the-art insight into SME financing in Europe It is worth noting that several studies included in this part of the book rely on unique data provided by the ECB Survey on the Access to Finance of Enterprises (SAFE), which, since 2009, collects comparable, timely, and frequent financial information about access to credit and financing constraints experienced by firms as well as a series of firm characteristics related to SMEs in the European Union The first chapter by Ferrando and Mavrakis examines the external financing channels of non-financial firms, comparing SMEs and mid-­ caps with large enterprises over the period 2009–2015 In particular, the chapter offers an analysis of the non-bank funding available to SMEs (i.e grants/subsidized loans, trade credit, other loans, leasing, debt securities, mezzanine financing, equity) and uses the SAFE data to assess whether these alternative sources of funding are accessible to SMEs and how their use differs across firms and countries After demonstrating that trade credit as an alternative to bank loans is the most common source of funding for ‘credit constrained firms’, the authors highlight the different pattern between constrained firms in stressed versus non-stressed countries The evidence shows that it is more difficult for constrained firms in stressed countries to switch between sources of financing Further, the results show that large firms access various sources of financing more easily, while the market-based funding is rarely accessible to SMEs In the second chapter, Moro, Maresch, Ferrando, and Barbar investigate how the ability of banks to recover loans from borrowers in financial distress affects the propensity of banks to supply credit as well as the propensity of SMEs to apply for bank loans Combining the  Foreword  ix SAFE data with data from the World Bank Doing Business dataset, the evidence shows that while banks’ recovery rates seem to negatively affect the firms’ decision to apply for credit, surprisingly, it does not affect the banks’ decision to provide credit Additionally, the study shows that banks’ recovery rates play a different role depending on the country-level macroeconomic context The authors compare the economically weak countries with the strong ones and find that high recovery rates affect loan applications in the economically strong countries, and the banks’ decision to provide a loan in the weak countries In Chap 3, Galli, Mascia, and Rossi combine two strands of the literature: one that looks at the effects of legal-institutional factors and one that focuses on the impact of social capital in the credit markets They shed light on the determinants of the cost of funding for SMEs in the euro area In particular, the authors’ goal is to verify whether features such as the institutional and legal framework and the level of social capital significantly affect the cost of funding for SMEs in the euro area The authors perform an empirical analysis based on a large sample of 22,295 firm-level observations from 2009 to 2013 for a sample of 11 euro area countries, taken from the SAFE. Their findings show that a less efficient judicial system as well as a higher degree of concentration in the banking industry increases the cost of funding for SMEs The cost of funding for SMEs is, instead, reduced when the market share of cooperative banks and the social capital are higher Overall, the study supports the view that a better institutional environment and a wider presence of social capital produce positive externalities in the credit market The analysis carried out in Chap by Stefani and Vacca is rooted in the literature on gender discrimination in the credit market The authors investigate whether the gender of the firm’s manager/owner affects the access of small firms to credit The credit constraint of non-financial firms may, in general, be either due to rejection by the bank (lender), or due to self-restraint from the borrower who decides not to apply for a loan, fearing the lender’s rejection Relying on a large sample of SMEs (SAFE data) pertaining to the main euro area countries, the evidence shows that firms with female leadership use smaller amounts and less heterogeneous sources of external finance than their male counterparts In addition, as they anticipate a rejection by the lender, they self-restrain in applying to www.ebook3000.com x Foreword bank loans more than male-led firms and experience a higher rejection rate However, the econometric analysis does not provide evidence that banks are biased against female-led firms Rather, the different patterns for femaleand male-led firms are largely explained by some endogenous characteristics of female-led firms that structurally affect their credit constraint Chapter focuses on the evolution of the cost of financing for SMEs across banks and countries in the euro area over the period 2007–2015 Using the interest rate differential on loans—the small firm financing premium (SFFP)—Holton and McCann test whether smaller firms pay an interest rate premium compared with larger firms when borrowing from banks Their findings show that there has been a divergence in financing conditions across firm types; SMEs, compared with larger firms, have experienced a disproportionate increase in borrowing costs and a decline in access to credit This deterioration has been particularly acute in stressed economies: a clear bifurcation in the SFFP between stressed and nonstressed economies in late 2010 emerges from the analysis The authors are also able to show that the increase in banks’ non-­performing loan and credit default swap (CDS) spreads is associated with the increased cost of borrowing for SMEs as measured by the increase in the SFFP In Chap 6, Mascia, Mattana, Rossi, and D’Aietti investigate the causal relation between sovereign and bank credit risk in order to understand whether increases in sovereign risk (measured via sovereign CDS spreads) have an impact on the market perception of bank credit risk (measured via banks’ CDS quotes) The contagion effect between stressed sovereigns and the banking industry may be due to the exposure of domestic banks to their own country’s public debt Based on daily quotes from 24 banks, pertaining to euro-zone countries, for the period between January 2010 and 27 May 2014, the chapter provides empirical evidence that sovereign CDSs have played a relevant role during the sovereign debt crisis in Europe, that is, the market perception about a country’s credit risk significantly affected the evolution of banks’ CDSs These findings support the view that distressed banks, in response to the developments in sovereign debt turmoil, reduce lending to the private sector and increase the cost of funding for enterprises This, in turn, penalises especially the SMEs, which, as often shown in the literature, heavily rely on bank financing 318  Index current liabilities, 184, 192 cyclically lagging, 204 cyclically leading, 122, 204 D daily observations, 150, 153–6, 162, 162n6 quotes, x, 152 stock prices, 154 debt renegotiation, 268 securities, viii, 4, 7, 9, 12, 18, 98, 114, 195 default probability, 205, 211, 213–15, 217, 221 rate(s), vii, 30, 204 degree of concentration, ix, xii, 226 See also Herfindahl-­ Hirschman Index (HHI) delays in loans, 65 deleveraging needs, demand (of credit, of loans), 65, 70 dependence on bank financing, 175 dependent variable, 4, 14, 17, 19, 20, 35–6, 64, 73, 77, 103, 104, 153–62, 236, 241, 249–53 deposits, 122, 286, 291, 292, 295, 307 derivative, 150, 153 determinants of bank lending, xi determinants of the cost of funding for SMEs, ix developed countries, 151 development innovations, 210 stock market, 210 Dickey–Fuller, 158 discouraged firms, 18, 20–2 discrimination, ix, 86–8, 113, 115 distress distressed countries, 18 distressed economies, 151 diversification (policies), 226 dot.com, 288 duality (dual economy), 229 Dutch firms, 107 dynamic model, 162 dynamic panel, 152, 160 E Earnings before interest taxes depreciation and amortization (EBITDA), 267 EC See European Commission (EC) ECB See European Central Bank (ECB) ECB Survey on the Access to Finance of SMEs, viii, 4, 31, 34, 60, 77, 84, 89, 210 See also survey on the access to finance of enterprises (SAFE) economic crises, 60 cycle, 70, 159 growth, 23, 209, 210, 240, 294 economically weak countries, ix, 31 economies of scale, 137, 210  Index     efficiency of the legal system, 60, 65, 74 EFG See equity financing gap (EFG) EIB See European Investment Bank (EIB) ELTIFs See European long-term investment funds (ELTIFs) empirical model, 152 results, 221 strategy, 162 endogeneity, 70, 74, 113, 152, 160, 161 endogenous characteristics, x regressors, 160 energy sector, 258, 263 enforcement of legal rights creditor rights protection, 60 judicial enforcement, 60 enterprises, vii, viii, x, xi, xii, 5–7, 10, 62, 76, 85–7, 92n11, 96, 96n13, 97, 98, 101, 103, 109, 110, 115, 116, 152, 163, 174n2, 177, 177n5, 210, 225, 226, 241, 295 entrepreneur(s), 87, 90, 96n13, 97, 110, 115, 116 equity funds, 288, 290, 300, 304 shortfall, 189 equity financing, xi, 6, 183–5, 196 equity financing gap (EFG), 184–6, 189–91, 196 EU See European Union (EU) euro area, ix, x, xi, 3–24, 59–79, 83–117, 121–3, 126–8, 319 130, 137, 139, 141–3, 145, 146, 149, 151, 153, 174, 176, 178, 195, 196, 210 euro area crisis, 143, 145 euro interest rate swap, 159 Europe, vii, viii, x, 7, 23, 31, 59, 89, 121–46, 151–3, 162, 175n4, 204, 290, 298, 299 European Banking Authority, 175, 175n3, 176 European Central Bank (ECB), viii, 4, 5, 7, 12, 31, 34, 35, 38, 60, 62, 63n3, 72, 76, 77, 84, 89–91, 91n7, 97, 98, 114, 115, 126, 126n10, 149, 155, 158, 173, 174n2, 175, 176, 178, 195, 210, 286, 292 European Commission (EC), 4, 7, 23, 34, 62, 84, 90, 174, 174n2, 175n4, 177, 257n2 European economic policy agenda, xi, 174 European Investment Bank (EIB), 296 European investment fund, European long-term investment funds (ELTIFs), xi, xii, 285–308 European Parliament, 287 European Social Entrepreneurship Funds (EuSEF), 294–7 European sovereign debt crisis, 5, 149, 154, 156, 162 European Union (EU), viii, 3, 23, 34, 35, 174, 175n4, 177, 209, 210, 293, 295, 295n5, 296 European Venture Capital Funds (EuVECA), 294–7 www.ebook3000.com 320  Index Eurostat, 35, 38, 79, 177n5, 209 eurozone, 150, 152 EuSEF See European Social Entrepreneurship Funds (EuSEF) EuVECA See European Venture Capital Funds (EuVECA) expansionary monetary policies, xi, 158 expected default frequencies, 212 expected losses, 208 external finance premium, 125 financing, 3, 84, 86, 88, 90, 92, 96–101, 103, 104, 107, 109, 110, 113, 115, 116, 176, 195 financing channels, funds, 86, 98, 99, 103, 104 externalities, ix Extramot, 256, 256n1, 264, 305 F factoring, 97, 285 fair capital, 221 value, 204, 205 family businesses, 234, 235, 236n11, 238, 239, 246, 247, 250, 253, 285 fear of demand for credit, 54, 229 of lender’s rejection, ix female entrepreneur, 87, 97, 110, 115 female-led firms, 86 firms, 83–90, 92–8, 101, 103, 104, 107, 109, 110, 113, 113n15, 114–16 file for bankruptcy, 32 filing for a loan, 35, 41, 47 financial constrain, 12, 20–2, 96 consultants, 299 crisis, 3, 31, 34, 36, 41, 47, 50, 61, 121, 122n1, 123, 150n3, 156, 174, 203, 209, 226, 286, 289, 294, 306 director, 35 distress, 30, 55, 149–70 firms, 256, 266 frictions, 125 information, 211 information providers, 211 institutions, 173n1, 221, 303 intermediaries, 125, 151n2, 221, 241, 286 market, 5, 7, 22, 23, 38, 139, 141, 249, 254, 289n3, 303 ratios, 256 resources, 286–8, 291–3, 297, 298, 300, 303, 306, 307 stability, 23 viability, 61 wealth, 286, 303 financial accelerator, 216 financial and sovereign credit risk, 150 financial intermediation efficiency, 227 overall quality, 227 financial statement (granular), 177  Index     financial structure balanced, 195, 271 characteristics, 178, 190–2, 194 risky, 195 soundness, 183, 186, 195 unbalanced, 189–91, 196 financial structure of SMEs, 5, 178, 183, 185, 186, 189–92, 194–6, 210, 267, 271 financing conditions, 7, 121 constraints, 88 difficulties, 4, 116 gap, 7, 196, 294 instruments, 5–18, 195 options, 195 Finland, 8, 14, 17, 34, 36, 41, 47, 62, 63, 66, 72, 106, 109, 127 firm characteristics, 37, 62, 74, 76, 84, 115, 116 controls, 65, 70 demographics, 4, 14, 16 growth, 23, 90, 282 size changes, 182 fiscal laws, 255 fixed assets, 183, 186, 190, 268, 271 fixed investments, 97, 183, 185, 190 flexible funds, 290, 300 flow of credit, 149, 175 formal constraints, 20, 22 fragmentation, 23, 123 framework institutional, viii and legal, ix, viii social, viii France, 8, 14, 17, 34, 36, 47, 62, 63, 84, 89, 91, 92, 94, 95, 101, 321 102, 106, 109, 111–13, 123, 125–7, 130, 141, 143, 153, 154, 167, 174, 178–82, 205, 210 free-rider, 61 French firms, 107, 178, 190 FTSEMIB (Italian stock exchange index), 303 funding costs, 62, 124, 142 funding gap, G Gaussian copula, 215–20 GDP growth, 4, 14, 17, 19, 24, 35, 40, 43, 46, 49, 52, 65, 71, 73, 75, 76, 79 gender difference, 84, 92, 97, 98, 101, 103, 115, 116 discrimination, 87, 88, 115 effect, 84, 85, 103, 115 of the firm’s manager, ix of the firm’s owner, ix general manager, 35 generosity of people, 68, 78 German firms, 103, 107, 190 Germany, 8, 14, 17, 34, 36, 47, 62, 63, 84, 89, 91, 92, 94, 95, 101–3, 106, 107, 109, 111–13, 125–7, 130, 141, 143, 151, 153, 154, 168, 174, 178–82, 205 global financial crisis, 151n1 global investors, 23 government bonds Italian, 254, 292 return, 254 www.ebook3000.com 322  Index government debt crisis, 285, 306 grants, 4, 8–16, 18–22, 54, 77, 97 subsidized loans, 4, 9, 97 granularity, 204, 205 Greece, 8–14, 17, 19, 34, 36, 41, 47, 63, 66, 68, 72, 106, 109, 122n5, 127, 128, 132, 134, 153, 154, 156, 162, 168, 210 Greek firms, 107 gross domestic product (GDP), 4, 14, 17, 19, 24, 35, 38, 40, 42–7, 49, 50, 52, 65, 70–6, 79, 211, 228, 249, 285, 286, 289 gross revenues, 257, 258, 261, 264 guarantee schemes, 241 H Heckman selection, 31, 53 hedge funds, 290 Herfindahl-Hirschman Index (HHI), 35, 38, 40, 41, 43, 46, 47, 49, 52, 66, 67, 77, 86, 228, 233, 247 See also bank, concentration index heterogeneity, 68, 70, 124, 145, 177, 270, 272 high-risk companies, 191, 196 holding companies, 35, 270, 273 firms, 270 home bias, 287 household, 35, 234, 238, 239, 286–9, 293, 298, 300, 303 consumption, 229n4 I idiosyncratic (risk), 113, 122, 218 income statement, 193, 256 indicators of financial constraints, 12 industrial specialization, xii inflation, 35, 38, 40, 43, 44, 46, 49, 50, 52, 65, 70–5, 76, 79, 288n1 informal constraints, 4, 22 informal sociability, 68 information asymmetry, 32 hypothesis, 125, 141–2 opacity, 31, 33 informational advantage, 126 monopoly, 137, 138 information and agency problems, 6, 122 information and communications technology (ICT), 258, 259 informative asymmetry, 205 infrastructure projects, 23, 294 initial public offerings (IPOs), 288 insolvency (proceedings), 33, 37, 53, 55, 56 institutional characteristics, 70 environment, 59–79, 240, 241 investor, 256, 299n6, 308 institutional and legal framework, ix, viii instrumental variables, 160, 161 insurance companies, 306 products, 286, 297 integration, 158, 158n3  Index     intensity of involvement in community, 68 intensity of involvement in community and organizational life, 68 intensity of risk, 151 inter-company loans, 195 interest income, 241, 254 interest rate charged for loans, 122, 126, 127, 236 differential, 145 on lending, 238 premium, 122 spreads, 70, 237, 238, 244–7 intermediation, 35, 210, 227, 233, 240, 287, 292, 293, 295, 306 internal financing, 90 internal rating based comparability, 209 risk weighted asset (RWA), 136, 175n3, 209, 292, 307 systems, 205 variability, 270 internal sources (retained earnings), international groups, 256, 257, 272 international issuers, 23 internet platforms, 290 investment firms, 286, 287, 289, 289n2, 289n3, 290, 297–308 needs, 271, 273 trust, 286 investors’ perception, 152, 162 Ireland, 8, 12, 14, 17, 19, 34, 36, 47, 63, 65, 68, 106, 109, 122n5, 123, 127, 289 issuance motivations diversification of financing sources, 266, 267, 281 323 internal/external growth, 262 refinancing debt, 262 support operating cycle, 262 issued debt, 8–11, 13, 15, 16, 19–21, 206 ISTAT See Italian National Institute of Statistics (ISTAT) Italian financial system, 210, 285 Italian firms, 107, 110, 178, 190, 212, 257, 270 Italian National Institute of Statistics (ISTAT), 227, 228, 258 Italian regions centre, 232, 233, 241, 260 northern, 229, 232–4, 236, 239–41, 260, 263 southern, 232–4, 236, 238, 240, 241, 260 Italian Stock Exchange (Borsa Italiana), 255, 257, 257n3, 264 Italy, 8, 12, 14, 17, 19, 34, 36, 47, 61, 63, 65, 66, 72, 83n1, 84, 87–9, 91, 92, 94, 95, 101–3, 106, 109, 111–13, 122n5, 124–8, 141, 143, 153, 154, 156, 169, 174, 178–83, 210, 219, 221, 225, 227–9, 232, 234, 236, 238, 240, 241, 249–53, 255, 260, 263, 285–7, 290, 292, 297–303, 305, 307 J joint default probability (JDP), 214, 215 joint-stock companies, 256, 258 judicial system, 65, 74 judiciary, 31, 33 www.ebook3000.com 324  Index K key variable, 64–74, 77, 126, 156–8, 160–3 L lack of transparency, 59, 175 lagged values, 160, 162 variables, 161 lags, 160, 161, 162n6 large companies, 175, 176, 205, 207, 208, 258–60, 262 firm, 4, 7, 9, 10, 35, 38, 40, 43, 46, 49, 50, 52, 122, 123, 125, 127, 175, 176, 206, 217, 263, 272, 290 law (enforcement), 30, 33 leading role, 151 leasing, 4, 8–16, 18–22, 37–46, 48, 49, 51, 52, 97, 285 legal environment, 44, 60 system, 30, 31, 33, 50, 54, 55, 60, 62, 65, 76 legal-institutional environment, 59–79 factors, 61 legislation, 288, 295n1 Lehman Brothers, 123 lender, 29–56, 62, 86, 87, 122, 124, 126, 127, 137, 138, 145, 203, 208, 216 lending approach, 116, 196 bank, 176 benefits, 23, 56 choices, xi competition, 60, 151n2 conditions, 175 constraints, decisions, 30, 32, 37, 60, 175n3, 176, 190, 204 limited, 191 long term, 189 to the private sector, 152 relationship, 56 SMEs, 136, 137, 142, 175, 176 leverage excessive, 176, 178, 184, 186, 191, 195 higher, 176 undercapitalised companies, 92, 193 likelihood of applying for loans/ external financing, 98, 110 liquidity conditions, 239–40 problem, 184 shortage, vii listed banks, 153 companies, 293, 303 loan access difficulties, 191 application, 12, 20, 22, 29–56, 60, 103, 107, 110, 116, 186, 195 bank, 4–8, 12, 14, 22, 23, 33, 35, 40, 43, 46, 49, 52, 60, 61, 70, 78, 79, 86n3, 97–9, 101–12, 116, 173, 175, 195, 206, 210, 228, 229, 232, 240, 306 concentration, 223n8–9, 226, 236n12 demand, 103, 175  Index     diversification, 233 by firm category, 176 by firm size, 226 impaired, 227 long-term, 183 maturities, 236 portfolio, 216, 229 request, 39, 185 short-term, 126, 183, 189, 191, 195, 196, 240, 270 local credit system, 225 Lo Cascio-Bagarani (LB) index of specialization, 227 logit approach, 216 regression, 31, 36, 53 long-term investment, 186, 195, 293, 296 loss given default, 208 Luxembourg, 35, 127, 263, 289 M macroeconomic conditions, 17, 18, 158 controls, 65, 70, 73, 76, 79 features, 63, 70 performance, 125, 132 management conditions, 269, 270 manufacturing bank loans, 229, 232 specialization, 229 market imperfections, index, 160, 162 perception, 152, 162 power, 125, 126, 134, 141 share, 70, 74, 76, 77, 125, 134, 136, 141, 142, 146, 285–308 325 value, 153, 159, 216 market-based financing, 5, 6, 22, 23 maturity, 30, 60, 64n4, 100, 103, 123n6, 153, 183, 185, 186, 206, 236–9, 244–8, 289, 294 Medium and Long Term Financing Gap (MLTFG), 184–6, 188–94 medium-sized firms, 35, 178, 211, 216 methodology, 19, 32, 34–6, 62–73, 159–60, 163, 174, 183–6, 207, 212–15 mezzanine financing, 8, microeconomic features, xi micro firm, 24, 39, 42, 45, 48, 51, 105, 108, 211, 216, 218, 219 mid-caps, minibond civil law, 255 fiscal law, 255 issuance, 257, 259, 263, 266, 272 issuers, 256–66, 269, 270, 272, 273 listed, 255–9, 261, 305 market, 256, 272 size, 256, 258, 263, 264, 271, 272 MLTFG See Medium and Long Term Financing Gap (MLTFG) monetary policy expansion, 158, 196 transmission, 121, 130, 175 monitoring system, 273 moral hazard, 61 Morningstar, 299, 300 mortgages, 61, 285 multilateral trading facility, 294, 296, 305 www.ebook3000.com 326  Index multinomial logistic estimates, 105, 108, 111, 112 estimation, 85, 103 mutual funds, 272, 286–93, 295, 295n1, 296–308 N National Bank of Greece, 154 net debt position, 267 fixed assets, 268 income, 184, 186, 188, 191, 193–6 Netherlands, 8, 12, 14, 17, 34, 36, 47, 63, 65, 66, 68, 72, 106, 109, 127, 128 New Basel Accord Basel II, 204, 206, 221 Basel III, 41, 203–22 capital adequacy, 206, 221 Capital Requirements Directive (CRD IV), 292, 306 CRR, 209 portfolio invariant, 221 regulation, 204, 206–9, 221 regulatory capital, 208, 209, 213, 221 regulatory formula, 209 non-bank financing, 3–24 funding, viii funding sources, 4, 174 non-bank external finance issued debt, 8–11, 13, 15, 16, 19–21, 206 leasing, 4, 9–11, 13, 19 mezzanine financing and equity, 8, other loans, 8–14, 97, 107 trade credit, 4, 8–11, 13, 14, 107 non-distressed countries, 18 non-financial companies, xi, 207, 234, 235, 237–9, 249, 251 corporations, 3, 5–8, 19, 22, 24 firms, vii, viii, ix, 62, 174, 234, 239 non-interest income, 241 non-monotonic curve, 216 non-performing loans (NPLs), 124, 125, 134, 138, 139, 142–4, 146, 176, 226, 227, 229, 234, 235, 238–41, 244, 248–50, 286, 292, 306 non-stationarity, 158, 158n3 non-stressed countries, viii, 17, 130 economies, x, 121, 123, 125, 131, 146 NPLs See non-performing loans (NPLs) O OLS estimates (Ordinary Least Squares estimates), 249–53 open architecture, 289, 289n2 open-end mutual funds, xii, 286–91, 293, 296–308 operating company, 257 cost, 270, 271, 273 cycle, 262 income, 268 organisation, 273, 280, 282 optimal financial structure, 189 ordered logit model (estimates), 64  Index     order of integration, 158 ordinal variable, 64 organizational structure, 256, 269, 271–3 other loans (informal or from a related company), viii, 4, 8–10, 12, 14, 18, 19, 22, 107 owner, ix, 6, 35, 90, 106, 113, 116 ownership (structure), 7, 103 P panel component, 91, 114, 115 data, 36, 122, 145, 160 dimension, 91, 152 regression, 36 par value, 153 patrimonial and financial features, 272 performance analysis, 266–69 best, 267, 270, 271, 273 business, 269 model, 271 ratios, 273 peripheral euro area, 127, 139 placement, 195, 285, 292, 306 planned investments, 273 policies, xi, 19, 23, 41, 84, 116, 123n6, 149, 150, 158, 176, 219, 226, 227, 236, 236n12, 294 policy makers, xi, 68 pooled regression, 236 portfolio diversification process, 273 invariant, 221 327 Portugal, 8, 14, 17, 19, 34, 36, 47, 63, 66, 68, 72, 122n5, 127, 128, 130, 151, 153, 156, 169, 210 pre-crisis, 128, 154–6 premium(s), x, 121–46, 153, 158n3, 159 pre-sovereign crisis, 158 price terms and conditions, 64 price (transmission), 239 pricing policies, 176, 227, 236, 236n12 private banking, 286 banks, 133, 286, 288n1, 289n2, 290, 290n4 equity, 285, 306 investor(s), 286–91, 289n3, 294, 295, 298, 299n6, 300 sector, x, 133, 152 probability of default, xi, 159, 162, 163, 176, 207, 218 probit model, 18, 23 regression, 20, 53 procedures number, 65, 74 procyclical, 203, 219 See also cyclically lagging; cyclically leading procyclicality, xi pro-cyclical nature of SME lending, 176 production activities dispersion, 229 volatility, 229 productive sectors, 229, 233, 240 productivity, 123, 141, 256, 272 www.ebook3000.com 328  Index profitability bank, 44, 124, 306 projects, 174, 249 prospects, 186, 195 risk-adjusted, 206 profit(s), 24, 37, 38, 40, 41, 43, 44, 46, 49, 50, 52, 53, 292 Prometeia, xii, 227, 227n2, 228 property protection, 30, 33, 60 rights, 30, 33 proprietary trading, 195 protection buyer, 153 seller, 153 proxy, 68, 74, 159, 186, 226, 228, 236n12 public debt, x, 300 engagement, 68 Q qualifying portfolio undertaking, 294–6 qualitative variable, 64, 103 quasi-equity instruments, 294 R rating agencies, 204, 211, 264, 273 investment grade, 264 no rating, 265 speculative grade, 264 transitions, 213 undisclosed, 265 rating transitions, 213 real activity, 4, 14 economy, 149, 229, 294, 295 estate, 259–62, 265 recovery rate(s), ix, 31–6, 40–7, 49, 50, 52, 54–6, 205 redemption rights, 296 traditional bank lending, 174, 273 refinancing debt See also issuance motivations existing, 259 regional banking system, 228, 229, 236n13 clusters, 232, 239 regression, 17, 19, 20, 24, 31, 35, 36, 41, 44, 45, 47, 50, 53, 113, 116, 158, 236, 236n13, 248–54 regulated market, 294, 296 regulation (capital), 292, 295, 306 regulatory capital, 175, 208, 209, 213, 221, 307 changes, 258, 272 debates, 23 framework, xi, 209, 216, 219, 221, 222 rejected firms, 22 rejection(s), ix, x, 4, 12, 20, 23, 37, 85, 87, 98, 101, 103, 104, 106, 107, 110, 113, 116 relationship lending, x, 56 skills, 308 reliance on the domestic economy, viii, 122 resolving insolvency, 36 restrictions (on bank financing), vii  Index     results from (credit/loan/finance) application, 102, 108, 112 retained earnings, 8, 37, 40, 43, 46, 47, 49, 50, 52 return on asset (ROA), 184, 188, 193 return on investment (ROI), 184, 188, 193 reverse causality, 150 risk common, 218 counterparty, 152, 153 credit, x, 150, 150n1, 152, 153, 159, 162, 163, 204–9, 212, 218–20, 226, 227, 238, 240, 241, 248, 295 factor(s), 150, 205, 217, 218, 221 free, 139, 141, 159, 288 idiosyncratic, viii, 122, 218 investment, 150, 297 premium, 139, 159 profile(s), 150, 152, 300 systematic, 208, 217, 218, 221 weighted asset, 209, 292, 307 riskiness, 20, 87, 113, 114, 159, 206, 249 risk weighted asset (RWA), 175n3, 209, 292, 307 robustness check, 5, 18–22, 32, 53–4, 113–15 round trip funds, 290n4, 298 S SAFE See Survey on the access to finance of enterprises (SAFE) sample selection, 53, 54, 84 saving allocation, 210 329 savings, 30, 286, 287, 300 secondary markets, 149, 152, 296 sector of activity, 84, 104n14 securities traded, 256 securitization, 306, 307 series, viii, 24, 62, 123, 155, 156, 158, 158n3, 162, 228, 280, 282 services sector, 10, 84, 106 specialisation, 227, 232 shareholders’ equity, 189 short term loans, 126, 183, 189 191, 195, 196, 240, 270 short-term maturities, 236 SICAV (Italian investment vehicle), 286 single systematic risk factor, 221 size (of the firm), 9, 37, 208 Slovenia, 122n5, 127, 128 slowdown of economic cycle, 70 small business, 87, 205, 206, 208, 217–20 cap, 303, 305, 308 firm(s), ix, x, 7, 9, 14, 61, 83–117, 121–46, 182, 205, 211, 213, 216, 217, 220 small and medium-sized enterprises (SMEs) access to equity financing, xi, bank-oriented, 285 borrowing costs, x, 122, 130 funding, xi, 125, 143, 307 lending, 136, 137, 142, 173n1, 175, 176 loans, 122n2, 137 relationship banking, 205 specialization, 125, 136–8, 143 turnover, 206 www.ebook3000.com 330  Index small firm financing premium (SFFP), x, 121–46 social characteristics, 70 environment, 63, 64, 76 social capital, x, 59–79 Società di Gestione del Risparmio (SGR), 298 solvency problem, 184 sources of finance, 4, 5, 7–15, 19, 22, 31, 37, 40, 41, 43, 44, 47, 49, 50, 52, 85, 246 sovereign bond markets, 155 bonds, 125, 134, 139, 143 credit default swap (CDS), x, 150–2, 156–8, 158n3, 159, 161–3, 167–70 crisis, 158 debt crisis, viii, x, 5, 123, 127, 139, 141, 149, 151, 152, 154, 156, 158, 162 debt premia, 196 debt turmoil, x risk, x, 151 shocks, 150, 152, 163 stress, 154 Spain, xi, 8, 14, 17, 19, 34, 36, 47, 63, 66, 68, 72, 84, 89, 101, 103, 122n5, 125–8, 132, 134, 141, 143, 151, 153, 156, 170, 174, 178, 182, 210 Spanish firms, 110, 178 specialisation banking, 226 bank loan, 240 index of, 227 indicator(s), 227, 240 lending, xii, 226 production, 227, 228, 230, 232, 233, 240, 242, 243 productive, 226, 227, 229, 232, 240 sectorial, 227, 227n2 spillovers (risk), 151 spread(s), x, xii, 30, 70, 124–6, 128, 134, 139, 140, 143, 144, 146, 149–70, 176, 225–7, 236–9, 241, 244–9, 251–4 state-owned, 130, 266, 273 static (panel data) model, 160 stationarity, 158, 158n3, 158n5 stock exchange, 255, 257, 257n3, 264, 300, 303, 305, 308 index return, 161 index volatility, 161 prices, 154, 159 stock market capitalization, 133 listing, 257 value, 159 volatility, 159 stressed countries, vii, viii, 17, 19, 122, 126, 158 economies, x, 121–3, 125, 130, 141, 143, 146, 149, 151 strong economic, 34, 45, 50, 55, 114 structure of the credit market, viii, 87 subsidized loans, viii, 4, supply of credit, 10, 30, 113, 124, 150, 240 of loans, xii  Index     survey data, 85, 87 survey on the access to finance of enterprises (SAFE), vii, xi, 4, 7, 8, 31, 34–7, 60, 62, 64, 64n4, 73, 76, 77, 84, 85, 89–91, 91n9, 96, 96n13, 97, 98, 101, 103, 113–16, 210, 967n12 survivorship bias, 178 swap, x, 124, 134, 139, 150, 156, 159 Sweden, 151 T taxation, 184, 188, 193 terms and conditions, 64, 64n4, 97–101 tied agents, 288, 289n2, 290n4 time dummies effects, 160 series, 159 total assets, 139, 140, 142, 178, 179, 186, 189, 191, 196, 257, 257n2, 271 trade credit, viii, 4, 5, 8–10, 12, 14, 18, 19, 22, 37, 40, 43, 46, 49, 50, 52, 97, 98, 104, 106, 107, 114, 195 creditors, 184 receivables, 268 retail, 178 sectors, 4, 10, 92, 178 wholesale, 178 traditional banking (channel), xii, 255 traditional bank lending, xi, 174, 273 transaction lending, 173n1, 175 331 transmission channel(s), 152 of monetary policy, 121, 130 trust(s), 60–2, 64, 66, 68, 74, 286 turnover, 19, 24, 37, 38, 40, 41, 43, 44, 46, 49, 50, 52, 53, 92n10, 96, 104, 104n14, 174n2, 177, 186, 191, 194–6, 205, 206, 211, 218, 219, 256, 257, 257n2, 258, 259, 272 U unbalanced panel, 152 underestimation of risk, 273 unemployment (rate), 4, 14, 19, 24, 35, 38, 40, 41, 43, 46, 47, 49, 50, 52, 65, 72, 76, 123, 132, 146 unit root, 158, 158n3 universal bank model, 241 unlisted companies, 211, 259, 294, 295 firms, 255, 258 U-shaped curve, 218 See also non-monotonic curve V value added, 5, 227, 227n2, 228 VAR approach (Vector auto-­ regression model), 239 VAR model (Vector auto-regression model), 227 venture capital, 85, 241, 285, 294, 297, 306 volatility, 159, 229 voter turnout, 68 www.ebook3000.com 332  Index W Ward’s criterion, 232 waves, 8, 62, 63, 73, 85, 90, 91, 91n9, 97, 98, 114, 114n16, 116 weak capital buffer, 151 economies, 55 funding structure, 151 weaker equity, 271 weighted means, 12, 13 women-led enterprises/firms, 84, 85, 97, 103, 115, 116 See also female, firms working capital, 195 World Bank, ix, 31, 35, 36, 133 World Bank Doing Business dataset, ix Y young firm(s), 31, 35, 38, 55, 106, 107 ... Editor Access to Bank Credit and SME Financing Editor Stefania Patrizia Sonia Rossi Department of Economics and Business University of Cagliari Italy Palgrave Macmillan Studies in Banking and. .. international workshop Access to Bank Credit and SME Financing , held in Pula, Sardinia, on 10 October 2015 This book collects some of the papers presented at the workshop and is organised into two parts... the European Central Bank, European Central Bank, Frankfurt, Germany e-mail: annalisa.ferrando@ecb.int © The Author(s) 2017 S.P.S Rossi (ed.), Access to Bank Credit and SME Financing, Palgrave