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Strapped for Cash? Funding for UK high growth SMEs since the global financial crisis

Brown, Ross and Lee, Neil ORCID: 0000-0002-4138-7163 (2019) Strapped for Cash? Funding for UK high growth SMEs since the global financial crisis. Journal of Business Research, 99. pp. 37-45. ISSN 0148-2963

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Identification Number: 10.1016/j.jbusres.2019.02.001


While high growth firms (HGFs) are crucial drivers of economic growth, to date there has been a dearth of research examining their funding requirements. Drawing on a survey of over 8,000 UK Small and Medium Sized Enterprises (SMEs), this paper investigates the capital structure and access to credit in high growth SMEs in the period following the global financial crisis. The findings challenge conventional wisdom about high growth SMEs in certain respects. They find it no harder than non-high growth SMEs to access external finance. The vast majority of high growth SMEs rely strongly on debt-based finance for their funding, not equity finance. High growth SMEs are much less likely to seek finance for working capital purposes but are no more likely to seek finance to invest in R&D than less rapidly growing SMEs. The findings suggest little justification for government intervention aimed at increasing credit availability for HGFs as currently espoused by the UK government.

Item Type: Article
Divisions: Geography & Environment
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
Date Deposited: 01 Feb 2019 10:27
Last Modified: 20 Oct 2021 00:55

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