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Publications

EIF Working Paper n. 44: Financing Micro Firms in Europe: An Empirical Analysis

EIF Working Paper n. 44: Financing Micro Firms in Europe: An Empirical Analysis

Research & Market Analysis (RMA) has the presents "Financing Micro Firms in Europe: An Empirical Analysis", n.44 of EIF's Working Paper Series.

The vast majority of firms in Europe are micro firms. This EIF Working Paper investigates the financing patterns of these enterprises. Based on a large European company-level data set, the paper finds that micro firms differ in their financing patterns from small and medium-sized companies. The empirical results show that micro firms are more likely to use internal financing instruments, whereas they are less likely to use state subsidies, trade credit or asset-based financing instruments. Furthermore, micro firms differ from medium-sized firms by using more short-term debt (credit card overdrafts, credit lines and bank overdrafts). The implications of these findings for micro firms and policy makers are discussed.