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Small business investment sensitivity of debt before and during the global crisis

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  • Ramzi Benkraiem

    (Audencia Recherche - Audencia Business School)

Abstract

This article aims at studying the influence of debt on small business investment in a European context, i.e. France. The empirical findings, robust to the endogeneity analysis, lead to several interesting results. In particular, credit institutions privilege corporate manager monitoring before the recent crisis, especially for low growth firms. They limit the scope of this monitoring in favor of a higher restriction of debt access during the crisis period. To cope with this constraint, small businesses tend to intensify the use of internal financial resources. These results, although coherent with the disciplinary role of debt stipulated by agency theories of corporate leverage, moderate the magnitude of this role according to the global crisis effect.

Suggested Citation

  • Ramzi Benkraiem, 2014. "Small business investment sensitivity of debt before and during the global crisis," Post-Print hal-00998472, HAL.
    • Handle: RePEc:hal:journl:hal-00998472
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    Cited by:

    1. Ludovic Vigneron & Ramzi Benkraiem, 2015. "Does banking relationship configuration affect the risk-taking behavior of French SMEs?," Economics and Business Letters, Oviedo University Press, vol. 4(4), pages 166-174.

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    More about this item

    Keywords

    small businesses; growth opportunities; Debt; investment; global crisis.;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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