Øivind Anti Nilsen, NHH, Norway

Borrowing Activities during the Financial Crisis: SME versus large firms


Abstract

This study investigates the effects of the Financial Crisis in the late 2000s on both SMEs' and large firms' borrowing activities. By utilizing high-quality data from official sources, we disentangle the evolution of demand and supply factors of firm-level borrowing activities over the course of the crisis. Contrasting theoretical predictions we find SME not to be affected by the crisis in a specifically pronounced manner. Our analyses suggests a general drop in loan demand as well as supply independent from firms' size. It is rather the availability of other funding sources and firms' riskiness that determine the degree of financing constraints. From a policy perspective, our results suggest that it is more efficient to address the underlying causes of (small) firms' vulnerability during economic slowdowns instead of trying to improve access to funding for SME in general.


Øivind A. Nilsen is a professor at the Norwegian School of Economics (NHH) where he teaches econometrics, macroeconomics, and labour economics.

His research includes analyses of firm behaviour (investment, labour demand, and pricing behaviour), and labour economics (plant closure, scarring effects/unemployment, inequality and intergenerational mobility, wage formation, transition school-to-work, early retirement, and sickness absence). More recently, he has worked on industrial organisation and resource economics.

His publications are found in journals such as Review of Economics and Statistic, European Economic Review, Labour Economics, Oxford Bulletin of Economics and Statistics, Scandinavian Journal of Economics, and Oxford Economic Papers.