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Financing Gap and SME Employment Growth: Beyond Access to Finance

Publication Papers

The key aim of our research was to investigate the relation between the perceived changes in financing gap and employment growth by SMEs in the EU. The paper builds on and extends the analysis of SAFE survey data, in order to focus on the question of employment creation which is at the core of the current economic policy debate in the EU. The main finding emerging is that changes in the financing gap do not appear to constrain employment growth, but are strongly correlated with job destruction. This innovative research analyzed the role of the perception of external finance accessibility, whereas many other papers study the influence of the actual availability or actual constraints; as such this study points to an important relationship between the opinion of business owners and actual business growth.

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