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Access to finance: Small and Medium Enterprises effect on Economic Growth

Lindgren, Ebba LU (2015) NEKN05 20151
Department of Economics
Abstract
The aim of this paper is to examine the effect small and medium enterprises’ (SMEs) access to finance has on economic growth. The relationship will be explored using data from the European Commission’s SMAF index covering the 28 EU member countries. By using the System Generalized Method of Moments (GMM) estimator, a significant and robust relationship between access to finance and economic growth is found. The results show that access to finance affects economic growth through Labour productivity and Total Factor productivity growth, but not through GDP per capita growth. Based on these results a discussion is put forward regarding the relationship between SME access to finance and productivity with respect to R&D investments. The SME... (More)
The aim of this paper is to examine the effect small and medium enterprises’ (SMEs) access to finance has on economic growth. The relationship will be explored using data from the European Commission’s SMAF index covering the 28 EU member countries. By using the System Generalized Method of Moments (GMM) estimator, a significant and robust relationship between access to finance and economic growth is found. The results show that access to finance affects economic growth through Labour productivity and Total Factor productivity growth, but not through GDP per capita growth. Based on these results a discussion is put forward regarding the relationship between SME access to finance and productivity with respect to R&D investments. The SME support programs that the EU are funding are also discussed and weather they are implemented in a way that helps firms gain access to credit and contribute to economic growth. (Less)
Please use this url to cite or link to this publication:
author
Lindgren, Ebba LU
supervisor
organization
alternative title
Small and Medium Enterprises: Does access to finance effect Economic Growth?
course
NEKN05 20151
year
type
H1 - Master's Degree (One Year)
subject
keywords
Access to Finance, Economic Growth, EU-28, SMEs, GMM
language
English
id
5473509
date added to LUP
2015-06-30 10:04:44
date last changed
2015-06-30 10:04:44
@misc{5473509,
  abstract     = {The aim of this paper is to examine the effect small and medium enterprises’ (SMEs) access to finance has on economic growth. The relationship will be explored using data from the European Commission’s SMAF index covering the 28 EU member countries. By using the System Generalized Method of Moments (GMM) estimator, a significant and robust relationship between access to finance and economic growth is found. The results show that access to finance affects economic growth through Labour productivity and Total Factor productivity growth, but not through GDP per capita growth. Based on these results a discussion is put forward regarding the relationship between SME access to finance and productivity with respect to R&D investments. The SME support programs that the EU are funding are also discussed and weather they are implemented in a way that helps firms gain access to credit and contribute to economic growth.},
  author       = {Lindgren, Ebba},
  keyword      = {Access to Finance,Economic Growth,EU-28,SMEs,GMM},
  language     = {eng},
  note         = {Student Paper},
  title        = {Access to finance: Small and Medium Enterprises effect on Economic Growth},
  year         = {2015},
}