Small medium enterprises (SMEs), banks and the spatial differentiation of access to finance
This paper examines the relevance of spatial differentiation on SMEs鈥� access to bank finance following the 2007 financial crisis
Abstract
By utilizing the SME Finance Monitor and a unique dataset on the geographical location of all bank branches in 11 UK economic regions, this paper examines the relevance of spatial differentiation on SMEs鈥� access to bank finance during the period of economic weakness following the 2007 financial crisis. We find evidence suggesting the presence of a regional-specific effect on SMEs鈥� access to bank finance. Our findings show that greater functional distance between bank headquarters and branches exacerbates the credit constraints faced by local SMEs although the impact of a smaller operational distance between branches and local SMEs is inconclusive, ceteris paribus. Our finding holds over a battery of robustness tests.
This is an output from the 鈥楧elivering Inclusive Financial Development and Growth鈥� project
Citation
Tianshu Zhao, Dylan Jones-Evans; SMEs, banks and the spatial differentiation of access to finance,聽Journal of Economic Geography, Volume 17, Issue 4, 1 July 2017, Pages 791鈥�824