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In the wake of the 2008 financial crisis, there has been increased focus on access to finance for small and medium sized firms. Some evidence from before the crisis suggested that it was harder for innovative firms to access finance. Yet no research has considered the differential effect of the crisis on innovative firms. This paper addresses this gap using a dataset of over 10,000 UK SME employers. We find that innovative firms are more likely to be turned down for finance than other firms, and this worsened significantly in the crisis. However, regressions controlling for a host of firm characteristics show that the worsening in general credit conditions has been more pronounced for non-innovative firms with the exception of absolute credit rationing which still remains more severe for innovative firms. The results suggest that there are two issues in the financial system. First, we find evidence of a structural problem which restricts access to finance for innovative firms. Second, we show a cyclical problem has been caused by the financial crisis and impacted relatively more severely on non-innovative firms.

•The gender gap in Old Europe has diminished significantly and is estimated to be as low as 6–7%.•The gender gap in New Europe remains large and could be as high as four times that in Old Europe.•The propensity to become self-employed increases in age past the common retirement age of 65.•The education structure of the self-employed is such that the lowest and highest educated both prefer self-employment.•Political and economic turmoil takes a generation to work its way through the system, but it is associated with higher rates of self-employment.

Loan guarantee schemes are used in many countries to provide financial support to small firms by guaranteeing loans from commercial banks, but questions remain about whether public intervention in private credit markets to support entrepreneurial firms is justified. This paper examines whether the UK Small Firms Loan Guarantee Scheme (SFLG) provides value-for-money to the UK tax payer, presenting a regression based performance approach which then feeds into a formal cost–benefit analysis. Specifically, we consider whether firm performance post-investment is such that it justifies the governments’ presence in the lending market and the costs associated with it. Our findings suggest that entrepreneurial firms that are able to access new finance through SFLG achieve superior performance in the form of improved sales, job creation and exports and that this justifies public intervention in private credit markets.

It is a widely held perception, although empirically contentious, that credit rationing is an important phenomenon in the UK small business sector. In response to this perception the UK government initiated a loan guarantee scheme (SFLGS) in 1981. In this paper we use a unique dataset comprised of small firms facing a very real, and binding, credit constraint, to question whether a corrective scheme such as the SFLGS has, in practice, alleviated such constraints by promoting access to debt finance for small credit constrained firms. The results broadly support the view that the SFLGS has fulfilled its primary objective.

This paper considers how the operating performance of JASDAQ companies is affected by the ownership structure pre- and post-IPOs. We document that operating performance varies according to managerial ownership in addition to the age and size of the firm. Our results on JASDAQ contrast with evidence from Cai and Wei [Pacific-Basin Finance Journal 5 (1997) 389], who analyze the operating performance of companies newly listed on the Tokyo Stock Exchange (TSE). They indicate the post-IPO deterioration in operating performance cannot be attributed to the reduced managerial ownership.

Despite the importance of high technology firms to the UK’s economy, relatively little is known about factors contributing to these firms’ long-run growth and survival. We examine these factors using a unique longitudinal dataset combining two waves of detailed surveys of 345 UK high tech firms and performance and survival data. We explore factors contributing to the performance and survival of these firms. Our results show that long-term survival rates are near two thirds for the firms in our sample, and that performance within the sample is skewed by a limited number of high performing firms. Overall we conclude that the early strategic decisions made by firms have long-run impacts on their survival and growth, and we suggest that policy measures targeted at shortfalls faced by these firms may have positive long-term consequences.

Small firms are reliant upon high street banks for the vast majority of their external borrowing. However, despite the dramatic increase in numbers of small firms over the 1980s, and the subsequent rise in bank lending to this sector, the relationship has been far from ideal. This paper investigates whether Scottish and English banks have different lending cultures. In doing so we provide some empirical evidence in support of the findings of Stiglitz and Weiss, that adjusting interest rate margins and/or collateral ratios did not reduce the problem of adverse selection. We tentatively conclude that Scottish banks appear to be more responsive, knowledgeable and sympathetic towards their small firm customers than English banks.

Hybrid venture capital funds have a small positive impact on firm performance. This paper explores the implications of this finding for public policy in the United Kingdom.