Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/317010 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
ETLA Report No. 161
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract (Translated): 
Finnish businesses face fewer financial challenges than their European peers. To the extent financial challenges do exist, they disproportionately affect young, small, innovative, internationally focused, and growth-seeking companies. Our findings are based on extensive firm-level data. The data and our approach dictate that the results should be interpreted from the point of view of a representative firm and from a long-term, structural perspective, with a focus on debt financing. Finland's financing challenges stem primarily from equity, not debt. The nation's bank-centric financial system inadequately supports growth driven by intangible assets. Moreover, the growth ambitions and abilities of company owners, boards, and executives leave something to be desired. We posit that Finland's fundamental issue is demand, not supply, of financing. Capital availability is sufficient. The core problem is insufficient initiative in identifying, capitalizing on, and scaling new ideas.
Subjects: 
Business finance
Financial constraints
Debt finance
Economic growth
JEL: 
E22
G30
G32
O16
Document Type: 
Research Report

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