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The effect of basel III implementation on SME access to financing in emerging markets and developing economies

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  • Fišera, Boris
  • Horváth, Roman
  • Melecký, Martin

Abstract

This paper studies the effect of Basel III implementation on the access to financing of small and medium-size enterprises (SMEs) in 32 emerging markets and developing economies by the initial level of SME financial inclusion. Analyzing a cross-country panel of SMEs in the difference-in-differences setting with a sample selection adjustment for possibly non-random implementation of Basel III, we find a short-term, moderately negative effect of Basel III on SME access to financing. The size of this effect depends on the degree of SME's initial financial inclusion. Interestingly, greater bank capitalization before Basel III implementation helped mitigate the negative effect.

Suggested Citation

  • Fišera, Boris & Horváth, Roman & Melecký, Martin, 2025. "The effect of basel III implementation on SME access to financing in emerging markets and developing economies," The Quarterly Review of Economics and Finance, Elsevier, vol. 100(C).
    • Handle: RePEc:eee:quaeco:v:100:y:2025:i:c:s1062976924001625
    DOI: 10.1016/j.qref.2024.101956
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    More about this item

    Keywords

    Basel III; Access to financing; Small and medium-size enterprises; Banks; SME financial inclusion; Difference-in-differences;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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