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Opportunities and limitations of public equity markets for SMEs

Author

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  • Iota Kaousar Nassr
  • Gert Wehinger

Abstract

This article on public equity financing for small and medium-sized enterprises (SMEs) complements earlier OECD work on market-based finance for SMEs. The development of this market segment could promote investment in SMEs and, together with securitisation and other non-bank debt financing instruments, encourage an enhanced allocation of risk and risk taking, and thus support growth. Despite the benefits of public SME equity, its share is small and an equity gap exists for risk financing more generally. A number of important impediments to the wider use of public equities for SMEs are identified, such as admission cost and listing requirements, lack of liquidity, educational gaps, limited ecosystems, and tax treatment, all of which require attention by regulators and policy makers alike.

Suggested Citation

  • Iota Kaousar Nassr & Gert Wehinger, 2016. "Opportunities and limitations of public equity markets for SMEs," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2015(1), pages 49-84.
    • Handle: RePEc:oec:dafkad:5jrs051fvnjk
    DOI: 10.1787/fmt-2015-5jrs051fvnjk
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    Citations

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    Cited by:

    1. Pierre Lortie, 2023. "Regulating Finance to Promote Growth: The Quebec Experience in Perspective," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 16(19), June.
    2. Pierre Lortie, 2019. "Nurturing Global Growth Companies: Time For A New Policy Toolkit," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 12(27), September.
    3. Maran, Raluca, 2022. "Improving MSMEs’ access to start-up financing in ASEAN countries," MPRA Paper 114501, University Library of Munich, Germany.
    4. Randall Jones & Yosuke Jin, 2017. "Boosting productivity for inclusive growth in Japan," OECD Economics Department Working Papers 1414, OECD Publishing.
    5. Laura Vasilescu, 2018. "Traditional Vs Modern Financing Techniques For Smes - A Global Perspective," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(46), pages 90-96, November.
    6. Laura Vasilescu, 2019. "Private Equity As Financing Source For Smes – An Outlook," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(47), pages 87-95, November.

    More about this item

    Keywords

    SME finance; market-based finance; SME public equity markets; growth markets; small caps; initial public offering (IPO); exchanges; risk capital; small equity offering;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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