SMEs, banks and the spatial differentiation of access to finance

Zhao, Tianshu; Jones-Evans, Dylan

Abstract

© The Author (2016). Published by Oxford University Press. By utilizing the SME Finance Monitor and a unique dataset on the geographical location of all bank branches in 11 UK economic regions, this paper examines the relevance of spatial differentiation on SMEs' access to bank finance during the period of economic weakness following the 2007 financial crisis. We find evidence suggesting the presence of a regional-specific effect on SMEs' access to bank finance. Our findings show that greater functional distance between bank headquarters and branches exacerbates the credit constraints faced by local SMEs although the impact of a smaller operational distance between branches and local SMEs is inconclusive, ceteris paribus. Our finding holds over a battery of robustness tests.

• Journal Article Type: Article
• Acceptance Date: Sep 7, 2016
• Online Publication Date: Oct 17, 2016
• Publication Date: Jul 1, 2017
• Deposit Date: Nov 25, 2016
• Publicly Available Date: Oct 18, 2018
• Journal: Journal of Economic Geography
• Print ISSN: 1468-2702
• Electronic ISSN: 1468-2710
• Publisher: Oxford University Press (OUP)
• Peer Reviewed: Peer Reviewed
• Volume: 17
• Issue: 4
• Pages: 791-824
• DOI: https://doi.org/10.1093/jeg/lbw029
• Keywords: banks, finance
• Public URL: https://uwe-repository.worktribe.com/output/907154
• Publisher URL: http://dx.doi.org/10.1093/jeg/lbw029
• Additional Information: Additional Information : This article has been accepted for publication in Journal of Economic Geography Published by Oxford University Press.
• Contract Date: Jan 16, 2017