Home > Research > Publications & Outputs > The cost of growth

Research

Electronic data

  • Author accepted file

    Rights statement: embargoed for a year

    Accepted author manuscript, 113 KB, Word document

    Available under license: CC BY-NC: Creative Commons Attribution-NonCommercial 4.0 International License

Links

Text available via DOI:

Keywords

View graph of relations

The cost of growth: small firms and the pricing of bank loans

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Published

Standard

The cost of growth: small firms and the pricing of bank loans. / Rostamkalaei, Anoosheh; Freel, Mark Stephen.
In: Small Business Economics, Vol. 46, No. 2, 02.2016, p. 255-272.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Rostamkalaei, A & Freel, MS 2016, 'The cost of growth: small firms and the pricing of bank loans', Small Business Economics, vol. 46, no. 2, pp. 255-272. https://doi.org/10.1007/s11187-015-9681-x

APA

Rostamkalaei, A., & Freel, M. S. (2016). The cost of growth: small firms and the pricing of bank loans. Small Business Economics, 46(2), 255-272. https://doi.org/10.1007/s11187-015-9681-x

Vancouver

Rostamkalaei A, Freel MS. The cost of growth: small firms and the pricing of bank loans. Small Business Economics. 2016 Feb;46(2):255-272. Epub 2015 Oct 14. doi: 10.1007/s11187-015-9681-x

Author

Rostamkalaei, Anoosheh ; Freel, Mark Stephen. / The cost of growth : small firms and the pricing of bank loans. In: Small Business Economics. 2016 ; Vol. 46, No. 2. pp. 255-272.

Bibtex

@article{fd723a194dcd4dc68f2aef8aff3ededb,
title = "The cost of growth: small firms and the pricing of bank loans",
abstract = "Drawing upon data from the 2007 UK Survey of SME Finance, the current analysis is concerned with the extent to which growth firms are discriminated on price in loan markets, or, more simply, the extent to which growth firms pay more for credit. Given relatively small turndown rates historically (Vos et al. in J Bank Finance 31(9):2648–2672, 2007), higher credit prices may be a more substantial growth constraint than the access to finance issues that have dominated the academic literature to date. To this end, we observe, inter alia, that firms who have recorded recent high growth are more likely to pay higher interest rates for the loan they obtained.Moreover, small-sized firms who intend to grow through the introduction of new products exhibit a higher probability of paying more for credit than their peers. Finally, acknowledging that banks are not risk funders, we discuss the potential policy implications of these findings.",
keywords = "Growth firms, Entrepreneurial financing, Bank loans, Interest rate, Innovative firms, L21, L26, G32",
author = "Anoosheh Rostamkalaei and Freel, {Mark Stephen}",
year = "2016",
month = feb,
doi = "10.1007/s11187-015-9681-x",
language = "English",
volume = "46",
pages = "255--272",
journal = "Small Business Economics",
issn = "0921-898X",
publisher = "Springer New York LLC",
number = "2",

}

RIS

TY - JOUR

T1 - The cost of growth

T2 - small firms and the pricing of bank loans

AU - Rostamkalaei, Anoosheh

AU - Freel, Mark Stephen

PY - 2016/2

Y1 - 2016/2

N2 - Drawing upon data from the 2007 UK Survey of SME Finance, the current analysis is concerned with the extent to which growth firms are discriminated on price in loan markets, or, more simply, the extent to which growth firms pay more for credit. Given relatively small turndown rates historically (Vos et al. in J Bank Finance 31(9):2648–2672, 2007), higher credit prices may be a more substantial growth constraint than the access to finance issues that have dominated the academic literature to date. To this end, we observe, inter alia, that firms who have recorded recent high growth are more likely to pay higher interest rates for the loan they obtained.Moreover, small-sized firms who intend to grow through the introduction of new products exhibit a higher probability of paying more for credit than their peers. Finally, acknowledging that banks are not risk funders, we discuss the potential policy implications of these findings.

AB - Drawing upon data from the 2007 UK Survey of SME Finance, the current analysis is concerned with the extent to which growth firms are discriminated on price in loan markets, or, more simply, the extent to which growth firms pay more for credit. Given relatively small turndown rates historically (Vos et al. in J Bank Finance 31(9):2648–2672, 2007), higher credit prices may be a more substantial growth constraint than the access to finance issues that have dominated the academic literature to date. To this end, we observe, inter alia, that firms who have recorded recent high growth are more likely to pay higher interest rates for the loan they obtained.Moreover, small-sized firms who intend to grow through the introduction of new products exhibit a higher probability of paying more for credit than their peers. Finally, acknowledging that banks are not risk funders, we discuss the potential policy implications of these findings.

KW - Growth firms

KW - Entrepreneurial financing

KW - Bank loans

KW - Interest rate

KW - Innovative firms

KW - L21

KW - L26

KW - G32

U2 - 10.1007/s11187-015-9681-x

DO - 10.1007/s11187-015-9681-x

M3 - Journal article

VL - 46

SP - 255

EP - 272

JO - Small Business Economics

JF - Small Business Economics

SN - 0921-898X

IS - 2

ER -