ESRI Policy Seminar: "Firm Growth, Credit Constraints and Financial Distress: A Cross-Border Study"

Venue: 

ESRI, Whitaker Square, Sir John Rogerson's Quay, Dublin 2 

Speaker: 

Martina Lawless (ESRI). 

Abstract: 

Access to credit is an important component in facilitating growth because firms need financing for investment, working capital, new market entry and innovation. This research looks at how firms use finance in Northern Ireland and in the Republic of Ireland, using detailed survey data collected by InterTradeIreland in 2012 and 2014. The results cover a broad spectrum of issues related to the funding of the SME sector, beginning by looking at the types of finance most commonly used, the demand for finance, examining the extent to which firms are subject to credit constraints and if this is affecting their overall performance, and how widespread instances of financial distress is amongst firms. We also examine the question of whether banks operate different strategies outside of their core domestic market by looking at the behaviour of the banking system, North and South of the border, and whether it impacts on these issues. We find a significant easing of credit constraints between 2012 and 2014, although younger and smaller firms were still found to have some difficulty in accessing finance. The presentation will be followed by a policy response given by Aidan Gough (InterTradeIreland).