Browsing by Author "Maresch, Daniela"
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Item Open Access Corporate governance regulation, legal origin and small business access to credit: a cross-european comparison(Financial Management Association, 2016-10-31) Maresch, Daniela; Moro, Andrea; Fink, MatthiasIn this cross-European study, we investigate the impact of two specific corporate governance mechanisms (shareholder rights and regulations on related-party transactions) on firms’ decision to apply for credit and the banks’ lending decision. We argue that this impact is contingent upon the legal origin that shapes the regulatory institutional setting in which the corporate governance mechanisms are embedded. We perform a cross-European comparison based on 45,596 firm-level observations from 13 countries. Logit regression reveals that corporate governance does not directly influence the banks' lending decision or the firms' decision to apply for credit. Rather, the impact of corporate governance on firms’ credit access unfolds through regulatory institutional contexts that are shaped only by specific legal origins. Our findings help to explain why firms in different countries are financed so differently by highlighting the relevance of the embeddedness of corporate governance mechanisms in regulatory institutional settings. For research, our findings call for more multi- level work. For business practice, our findings imply that a well-designed governance regime regarding shareholder protection can foster firms’ access to bank finance, and thus innovation and economic growth. For legislators, we highlight the importance of ensuring a fit between corporate governance mechanisms and the specifics of the national regulatory environment.Item Open Access Creditor protection, judicial enforcement and credit access(Taylor & Francis (Routledge): SSH Titles, 2016-09-09) Moro, Andrea; Maresch, Daniela; Ferrando, AnnalisaWe investigate the impact of the legal system on whether firms obtain the credit they apply for or not. Data comprise unique information provided directly by 48,590 firms from 11 European countries. We look at the strength of creditor protection, the strength of property rights, the time taken to resolve a dispute, the dispute resolution process’s costs and the number of procedures the plaintiff faces using data provided by the World Bank and the Heritage Foundation. The results suggest that the more efficient the judicial enforcement system is, and the higher the creditor protection is, the lower the probability that the firms are partially or totally denied credit. Our results are robust to selection bias (Heckman selection) as well as different controls and different estimation techniques. We find that these variables have considerable economic impact: the probability of obtaining credit is up to 40% higher in countries with more robust legal systems.Item Open Access Funding innovation and the regulatory environment – the role of employment protection legislation(Elsevier, 2022-03-23) Moro, Andrea; Maresch, Daniela; Ferrando, Annalisa; Udell, Gregory F.Access to external finance is essential for firms to engage in innovation processes and to grow. The regulatory environment plays a vital role in facilitating this access. We explore the role of employment protection legislation in the probability that firms obtain bank credit. We propose that restrictions on structuring employees’ work schedules and dismissing employees reduce access to credit by increasing the credit risk incurred by lenders. Our findings are based on 21,332 observations (European Central Bank SAFE dataset and World Bank Doing Business dataset) and reveal that a higher level of employment protection legislation is negatively related to the probability of firms obtaining bank credit. These results are robust to confounding, endogeneity, and selection bias, as well as to alternative specifications.Item Open Access Much Ado about nothing? Interest and non-interest products and services: Their impact on small banks’ margins(Cogent OA, 2017-06-09) Fredriksson, Antti; Maresch, Daniela; Moro, AndreaWe investigate the impact of interest and non-interest products and services on the margin a bank can derive from a specific customer. The analysis is based on 4,277 observations of relationships between small cooperative banks and small and medium-sized enterprises (SME) in Finland from 2001 to 2005. The results show that only long-term loans significantly contribute to the bank’s margin, whereas short-term loans as well as other additional products and services do not affect the bank’s margin, and cash management services even seem to reduce the bank’s margin. The findings suggest that small cooperative banks did concentrate on their core business during the first years of this millennium, i.e. lending, instead of diversifying their activities to increase their margin. However, by taking only financial considerations into account, small cooperative banks might forget about the non-financial impacts of their decisions, which may involve a considerable loss of information about SMEs.Item Open Access Spillover effects of government initiatives fostering entrepreneurship on the access to bank credit for entrepreneurial firms in Europe(Elsevier, 2020-03-06) Moro, Andrea; Maresch, Daniela; Fink, Matthias; Ferrando, Annalisa; Piga, Claudio A.We explore the role of government initiatives fostering entrepreneurship—in the form of tax advantages and government support—in influencing the probability that entrepreneurial firms obtain bank credit and are not discouraged from applying for a loan. We propose that government initiatives fostering entrepreneurship should allow entrepreneurial firms to access more bank credit by reducing the risk incurred by lenders. We simultaneously estimate the probability of obtaining credit when a firm applies for a loan and the probability that the firm has been discouraged when it does not apply for a loan. In both cases we control for endogeneity. Our results are based on 18,872 observations (from the European Central Bank (ECB) SAFE dataset and Global Entrepreneurship Monitor – GEM) and show that government initiatives improve the probability of entrepreneurial firms obtaining bank credit but do not affect the probability of being discouraged from borrowing. The results also suggest that government initiatives fostering entrepreneurship are of most benefit to younger, smaller, high-growth, and more innovative firms that operate in contexts where the demand for, and accordingly the competition for, bank credit is strongest.