Federico Beltrame, Luca Grassetti, Giorgio Stefano Bertinetti and Alex Sclip
This paper investigates the effect of entrepreneurial orientation (EO) on small- and medium-sized enterprises' (SMEs) access to credit. Starting with the idea that SMEs'…
Abstract
Purpose
This paper investigates the effect of entrepreneurial orientation (EO) on small- and medium-sized enterprises' (SMEs) access to credit. Starting with the idea that SMEs' strategy-making process, structures and behaviour can favour credit access, the authors also explore the moderating role of bank lending technologies in shaping this relationship.
Design/methodology/approach
This study relies on a unique survey of Austrian and Italian SMEs which contains detailed information on access to credit, EO dimensions, relationship lending and firm-level characteristics. The authors perform stepwise logistic regressions to assess whether EO interacts with SME's access to finance, and how relationship lending enhances this relationship.
Findings
Proactiveness, autonomy and competitive aggressiveness are important constructs for improving access to bank financing. Those dimensions became more important when a relationship bank is involved, suggesting a role for relationship lending in overcoming SMEs' opaqueness. In addition, relationship lending is crucial for innovative SMEs in overcoming credit denial rates.
Research limitations/implications
The small sample did not allow to analyse the effect of EO on discouraged borrowers. Furthermore, alternative measures of relationship lending (such as geographical proximity or the length of the relationship) and the share of credit granted by the relationship bank would have been interesting to further validate our results.
Practical implications
This study shows that EO dimensions and the type of lending technology are relevant for the financial success of SMEs. More precisely, the authors show that diversity within the banking system helps innovative, autonomous, proactive and competitive SMEs. These important pieces of soft information are injected into the final lending decision when a relationship bank is involved. The evidence suggests the need for SMEs to interact with local banks to fully exploit their EO posture.
Originality/value
To the authors' knowledge, this paper is the first attempt to analyse whether relationship lending can affect the EO–credit access relation.
Details
Keywords
Federico Beltrame, Josanco Floreani, Luca Grassetti, Michela Cesarina Mason and Stefano Miani
The purpose of this paper is to investigate whether guarantees characterised by different degrees of relationship lending (particularly referring to collateral and guarantees…
Abstract
Purpose
The purpose of this paper is to investigate whether guarantees characterised by different degrees of relationship lending (particularly referring to collateral and guarantees provided by Mutual Loan Guarantee Institutions) are able to convey some entrepreneurial orientation (EO) dimensions from firms to banks.
Design/methodology/approach
Exploiting data from a survey of Austrian and Italian SMEs, the empirical analysis is based on a sample of 328 small business firms. To test the signalling hypothesis, the authors used logistic regressions to assess the explanatory power of EO dimensions on the presence of several types of guarantees.
Findings
The analyses suggest that collateral cannot signal any EO dimension, even when controlling for the strength of the bank – firm relationship. Furthermore, SMEs are able to mitigate their financial risk through collateral only in a multiple bank – firm relationship. Lastly, innovativeness, competitive energy and aggressiveness allow SMEs to obtain external guarantees (mutual guarantees, bank guarantees and public guarantees, respectively), helpful in order to promote credit access.
Research limitations/implications
The mediation role of collateral and external guarantees on EO – credit access relation should be analysed in future research. Since the role of guarantees can change among different bank lending technologies, further studies should carefully consider lender’s characteristics. Lastly, the use of loan data in respect of the firm data can help to better separate the effect of loan and firm attributes on the collateral.
Practical implications
The study suggests how managers and entrepreneurs should manage the financial risk through collateral in different situations (one–to–one and multiple bank – firm relationship). Furthermore, depending on the level of innovativeness, competitive energy and aggressiveness, a firm should request a specific type of external guarantees in order to increment the credit availability, to maximise the possibility of success and to improve its performance.
Originality/value
To the authors’ knowledge, this paper is the first attempt to analyse whether EO affects the request for guarantees instead of credit access. This can be helpful especially when the banks involved in the relation apply a transaction lending technology.
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Rachele Anconetani, Federico Colantoni, Francesco Martielli, Duc Bui Huu and Do Binh
SPACs are reshaping the world of digital entrepreneurial finance. Firms in the digital sector often need access to public markets for long-term competitiveness. SPACs offer a…
Abstract
Purpose
SPACs are reshaping the world of digital entrepreneurial finance. Firms in the digital sector often need access to public markets for long-term competitiveness. SPACs offer a viable solution for these entities to collect capital and transition to public ownership quicker than IPOs. In this context, the paper aims to analyse and compare the performance of SPACs with those of IPOs in the post-business combination phase. The objective is to provide novel insights into the determinants of SPAC operating and market performance by considering firm-specific and deal-specific characteristics and the broader implications of market uncertainty.
Design/methodology/approach
The analysis applies univariate and multivariate OLS regressions to a sample of 96 SPACs to investigate the drivers affecting SPACs' performance vis-a-vis IPOs.
Findings
The study finds that SPACs underperform the matched group of IPOs on both operating and stock market performance (buy-and-hold strategy). The time to execute a business combination negatively correlates with SPAC performance, and proximity to the 80% deal threshold negatively affects share price performance and EBITDA margin.
Practical implications
The objective is to offer insights for institutional investors to effectively select prime targets within the SPAC framework.
Originality/value
This study strengthens the findings related to the drivers influencing the long-term performance of SPACs that were previously identified in prior research.