The Effect of Economic Uncertainty on Access to Finance: An Empirical Examination for European SMEs

YILMAZER S., AVCI E., ÇİNKO M.

Journal of East-West Business, 2024 (ESCI) identifier

  • Publication Type: Article / Article
  • Publication Date: 2024
  • Doi Number: 10.1080/10669868.2024.2426654
  • Journal Name: Journal of East-West Business
  • Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus, Academic Search Premier, IBZ Online, International Bibliography of Social Sciences, ABI/INFORM, Business Source Elite, Business Source Premier, Geobase, Hospitality & Tourism Complete, Hospitality & Tourism Index, PAIS International
  • Keywords: Access to finance, economic uncertainty, European SMEs
  • Marmara University Affiliated: Yes

Abstract

This study examines the effect of economic uncertainty on the probability of access to finance for the years between 2015 and 2020. Survey on Access to Finance of Enterprises (SAFE) dataset is used for measuring the level of access to finance and The IMF World Uncertainty Index (WUI) is considered as a proxy for uncertainty. According to probit regression model results, the uncertainty negatively affects the probability of firms’ access to bank loans while positively affecting the likelihood of access to trade credit. The results also reveal that some firm-level and macroeconomic indicators significantly impact access to finance.