دانلود رایگان مقاله انگلیسی مراحل اولیه ورشکستگی SME: اهمیت بازار بانکی محلی - اشپرینگر 2018

Abstract

This paper investigates the role of local context, with regard to the effect of local financial development and banking concentration, on a firm’s probability of bankruptcy at the post-creation stage. Our empirical setting is based on the logit multilevel model that better allows the treatment of data referring to different levels of aggregation (firm and local variables) applied to companies located in Italy. We find that a higher level of financial development in a province decreases the likelihood of corporate bankruptcy. This result is robust considering a 2SLS regression in which we use instruments for the local financial development and for the concentration of bank branches. In addition, our estimations suggest that the effect of local financial development and bank concentration is shaped by size. Local financial development is particularly significant for small firms, which traditionally suffer from great difficulty in accessing credit, whereas local banking concentration reduces the probability of bankruptcy for medium-sized firms.

4 Conclusions

The empirical investigation undertaken in this research targets estimating the impact of local financial development and bank concentration on SMEs’ bankruptcy at the early stage of their life. It is an issue for entrepreneurs who need to find financial resources to expand their business, for lenders who find an interest in maintaining relationships with secure borrowers, and for policy makers who are responsible for providing the best environment to enterprises. Local financial development appears to play a role in shaping bankruptcy risk, since it reduces the probability of bankruptcy of young SMEs.

Local financial development is positively related to growth and affects firm’s financial activities in different fields. In more financially developed areas inside a country, firms use more debt, and this feature strongly affects their financial decisions. A greater availability of bank credit provides companies with more potential to grow and survive. This effect is stronger for small new firms. The reason underlying this topic is that, if small firms find it more difficult to access financial services due to greater information and transaction costs, financial development that ameliorates these frictions can exert a particularly positive impact on small firms.