nep-cfn New Economics Papers
on Corporate Finance
Issue of 2018‒04‒09
five papers chosen by
Zelia Serrasqueiro
Universidade da Beira Interior

  1. Financing Micro Firms in Europe: An Empirical Analysis By Masiak, Christian; Block, Joern H.; Moritz, Alexandra; Lang, Frank; Kraemer-Eis, Helmut
  2. Bankruptcy Prediction: SMEs Case Study in Pontianak, Indonesia By Umiaty Hamzani
  3. Credit Guarantee Schemes for SME lending in Western Europe By Chatzouz, Moustafa; Gereben, Áron; Lang, Frank; Torfs, Wouter
  4. Credit supply and productivity growth By Francesco Manaresi; Nicola Pierri
  5. The European venture capital landscape: an EIF perspective. Volume IV: The value of innovation for EIF-backed startups By Signore, Simone; Torfs, Wouter

  1. By: Masiak, Christian; Block, Joern H.; Moritz, Alexandra; Lang, Frank; Kraemer-Eis, Helmut
    Abstract: The vast majority of firms in Europe are micro firms. Still, we know little about their financing patterns. Our paper aims to close this gap. Based on a large European firm-level data set, we find that micro firms differ in their financing patterns from small and medium-sized companies. Our empirical results show that micro firms are more likely to use internal financing instruments, whereas they are less likely to use state subsidies, trade credit or asset-based financing instruments. Furthermore, micro firms differ from medium-sized firms by using more short-term debt (credit card overdrafts, credit lines and bank overdrafts). The implications of these findings for micro firms and policy makers are discussed.
    Keywords: Micro firms,SMEs,enterprise financing in Europe,financing patterns
    JEL: C30 G20 G30
    Date: 2017
  2. By: Umiaty Hamzani (Universitas Tanjungpura, Jl. Prof. Dr. H. Hadari Nawawi, 78124, Pontianak, Indonesia. Author-2-Name: Dinarjad Achmad Author-2-Workplace-Name: Universitas Tanjungpura, Jl. Prof. Dr. H. Hadari Nawawi, 78124, Pontianak, Indonesia)
    Abstract: Objective – This study aims to examine the risk of bankruptcy among SMEs to determine whether there are any significant differences in the financial performance between SMEs that apply accounting standard and those that do not. Methodology/Technique – This research uses a case study method to examine SMEs in the business incubator under the auspices of the Bank Indonesia in Pontianak. Descriptive analysis and independent sample tests are also used in this study. Findings – The results show that neither of the SME groups are predicted bankrupt under the financial distress model. Furthermore, the independent sample tests show that, if using a significance level of 5%, there is no difference in the financial performance of both groups. However, if using a significance level of 10%, there is a significant difference in both groups
    Keywords: Financial Distress Model; Financial Ratios; Financial Statements; Going Concern Accounting Principle; SAK ETAP; SMES.
    JEL: G32 G33
    Date: 2018–02–21
  3. By: Chatzouz, Moustafa; Gereben, Áron; Lang, Frank; Torfs, Wouter
    Abstract: This report discusses the activity of credit guarantee schemes (CGSs) in Western Europe and presents an analysis based on a novel survey, conducted by the European Investment Bank (EIB) Group1, among 18 credit guarantee organisations in 13 countries and 33 banks operating in 17 countries. The report aims at providing a deeper insight into the driving motives and operational mechanisms of CGSs, and the financial intermediaries that use them. The current publication is a successor of an earlier report, published in 2014 by the European Bank Coordination "Vienna Initiative" Working Group on CGSs (EBCI, 2014), which provides a comprehensive overview on the use of CGSs for Small- and Medium-sized Enterprise (SME) lending in Central, Eastern and South-Eastern Europe (CESEE).
    Date: 2017
  4. By: Francesco Manaresi; Nicola Pierri
    Abstract: We study the impact of bank credit supply on firm output and productivity. By exploiting a matched firm-bank database which covers all the credit relationships of Italian corporations over more than a decade, we measure idiosyncratic supply-side shocks to firms' credit availability. We use our data to estimate a production model augmented with financial frictions and show that an expansion in credit supply leads firms to increase both their inputs and their output (value added and revenues) for a given level of inputs. Our estimates imply that a credit crunch will be followed by a productivity slowdown, as experienced by most OECD countries after the Great Recession. Quantitatively, the credit contraction between 2007 and 2009 could account for about a quarter of the observed decline in Italy's total factor productivity growth. The results are robust to an alternative measurement of credit supply shocks that uses the 2007-08 interbank market freeze as a natural experiment to control for assortative matching between borrowers and lenders. Finally, we investigate possible channels: access to credit fosters IT-adoption, innovation, exporting, and the adoption of superior management practices.
    Keywords: credit supply, productivity, export, management, IT adoption
    JEL: D22 D24 G21
    Date: 2018–03
  5. By: Signore, Simone; Torfs, Wouter
    Abstract: The creation of value through innovation is among the defining traits of new technology-driven ventures. In this paper we contribute to the literature by investigating the value of innovations for start-ups supported by EIF in the years 1996 to 2014, as measured through patent applications. The paper is structured around two main parts. The first part presents a series of descriptive statistics on EIF's VC investee patent portfolio and discusses some of the strategic aspects of patenting, such as timing and geographical coverage. The second part develops an econometric model to estimate the Euro-value of innovations based on patent renewal data, following the seminal work of Pakes and Schankerman (1984). We observe that start-ups are efficient at transforming financial capital obtained through VC financing into innovative capital. On average, for every Euro of EIF-supported VC financing, start-ups generated 2.74 Euro of private innovation value.
    Keywords: EIF,venture capital,innovation,patents,renewal data,start-ups
    JEL: G24 M13 O32
    Date: 2017

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