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Promoting Small Businesses' Access to Credit and Innovation through a Reform of the Bankruptcy System: Evidence from Slovenia

Author

Listed:
  • Marcus Dejardin

    (University of Namur)

  • Luca Farè

    (University of Bergamo)

  • Éric Toulemonde

    (University of Namur)

Abstract

This study examines the impact of a bankruptcy system reform process implemented in Slovenia on access to credit conditions and investments in innovation by small businesses. The reform process increased the recovery rate and reduced the time to resolve insolvency procedures, thus improving the efficiency of the bankruptcy system. Leveraging a dataset of 1,245 Slovenian micro-, small-, and medium-sized enterprises, our results document an increase in innovation investments by small businesses after the reform process due to more accommodating access to credit conditions.

Suggested Citation

  • Marcus Dejardin & Luca Farè & Éric Toulemonde, 2024. "Promoting Small Businesses' Access to Credit and Innovation through a Reform of the Bankruptcy System: Evidence from Slovenia," DeFiPP Working Papers 2405, University of Namur, Development Finance and Public Policies.
    • Handle: RePEc:nam:defipp:2405
    as

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    File URL: https://defipp.unamur.be/wp/defipp_wp_2024_5.pdf
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    References listed on IDEAS

    as
    1. Toni M. Whited & Guojun Wu, 2006. "Financial Constraints Risk," The Review of Financial Studies, Society for Financial Studies, vol. 19(2), pages 531-559.
    2. Kon, Y & Storey, D J, 2003. "A Theory of Discouraged Borrowers," Small Business Economics, Springer, vol. 21(1), pages 37-49, August.
    3. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    4. Ferrando, Annalisa & Mulier, Klaas, 2022. "The real effects of credit constraints: Evidence from discouraged borrowers," Journal of Corporate Finance, Elsevier, vol. 73(C).
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