Research Lines

Credit Guarantee Systems (Main Researcher: A. Trujillo-Ponce) 

SMEs are typically limited in their capacity to access credit because of under-collateralization, limited credit history, and, often, a lack of expertise needed to produce sophisticated financial statements. By providing a (partial or total) guarantee of the loan, the guarantor can help the SME compensate for the lack of collateral or creditworthiness; thus, the guarantee constitutes an interesting tool to improve SME access to bank financing. Specifically, a credit guarantee scheme is a risk transfer and risk diversification tool, as the issuer of the guarantee assumes repayment of part (or all) of the loan upon firm default. Moreover, it is often remarked that a loan guarantee scheme will help the small business market avoid the adverse information problem that leads to credit rationing. The presence of guarantee schemes in EU initiatives for SME financing has increased due to the 2007/2008 economic crisis, and more recently because of the coronavirus pandemic. EU financing programs are generally channeled through financial intermediaries, which are closer to SMEs and are well qualified to judge their needs.

For more information, please contact at atrujillo@upo.es

Entrepreneurial Finance (Main Researcher: C. Cardone-Riportella)

SMEs and Entrepreneurial Initiatives face serious difficulties when accessing credit markets, due to information asymmetries. Among the main solutions the firms can find to solve this problems are the following: i) the development of mature, consolidated banking relationships between lender and borrower; ii) the expansion into alternatives markets, and iii) the promotion of mutual guaranties systems.

For more information, please contact at ccardone@upo.es

Capital structure of SMEs (Main Researcher: M.J. Palacín Sánchez)

The study of the determinants of capital structure of companies represents a major line of research in finance. According to this research, a combination of factors related to the characteristics of the company and the environment within which the company does business determines its capital structure. Most empirical studies have focused on the relevance of firm factors in capital structure and used samples of single-country firms. More recently, studies analyze whether the environment is a factor of influence in financing decisions. In a more innovative way, studies that analyze the relevance of institutional factors using samples of single-country firms are emerging. In this case, the idea is that within one country, institutional differences can exist that affect the choice of the capital structure. The influence of local institutional factors is particularly significant for SMEs, since they usually have restrictions which limit them to operating within the local environment.

For more information, please contact at palacin@us.es