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Casey, Eddie
O'Toole, Conor M.
Year of Publication: 
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Working Paper, The Economic and Social Research Institute (ESRI), Dublin 450
The financial crisis has brought to the fore concerns regarding small- and medium-sized enterprises' (SMEs) capacity to access traditional bank lending. Using European firm-level data on SME access to finance since the onset of the financial crisis, we find that bank-lending constrained SMEs are significantly more likely to avail of alternative forms of external finance, controlling for firm-level and country-level characteristics. We then determine the implications that usage of alternative forms of finance can have for certain economically desirable business activities. In particular, we find that using alternative finance substantially reduces the likelihood of business fixed investment. This effect is not evident for business innovation.
Financial Crisis
Credit Constraints
Bank Lending
Trade Credit
Document Type: 
Working Paper

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