Journal Article

European SMEs’ growth: the role of market-based finance and public financial support

Rossolini, Monica, Boccaletti, Simone, Ferrando, Annalisa, Rossi, Emanuele

2025

Overview

The study investigates the role of market-based finance and public financial support in aiding scaling up by European SMEs. First, we analyse the impact of public loan guarantee schemes on firms’ access to market-based instruments. Second, we study whether firms’ access to market-based finance and the use of public grants boost a firm’s (ex post) growth. The analysis is based on a unique and original dataset of about 31,000 Eurozone firms in the 2009–2020 period. The study finds that firms’ access to market-based finance is (i) driven positively by the previous use of public financial support schemes and (ii) has a positive effect on subsequent growth. In particular, SMEs display relatively higher growth in fixed assets, while for large firms, growth is mainly driven by current assets. Moreover, SME issuers using public grants achieve significantly stronger growth than comparable firms.

• Publisher: Springer US,Springer Nature B.V
• Subject: Access / Access to finance / Assets / Bonds / Business and Management / Business growth / Companies / Corporate finance / Economic factors / Economic growth / Entrepreneurship / Eurozone / Finance / Financial support / Financing / Grants / Guarantee schemes / Guaranteed loans / Industrial Organization / Investments / Management / Market-based finance / Markets / Microeconomics / Plain language / Policy making / Public finance / Public financial support / Public opinion / Research Article / Scalability / Small & medium sized enterprises-SME / Small business loans / SME financing / SME growth / Support schemes