Comparative Study of the Relevance of Equity Financing in European Smes

Abstract

This paper contributes to the academic debate on the pecking order theory and SMEs equity financing, in this equity financing gap. In order to address this problem, this study relies on the empirical design that is driven by the premises of the pecking order theory and distinguishes between the relevance of internal funds vs. external equity. The main aim of this study is to investigate whether the relevance of equity financing for European SMEs is driven by the country-specifics (captured by the clusters of the EU countries) and whether there are any other factors that may potentially explain the relevance of internal funds or external equity, with respect to SMEs performance and characteristics. For that purposes the SAFE survey data were used to run non-parametric and correlations analysis. The results have clearly indicated that there are statistically significant differences between the clusters of the EU countries (if we differentiate between core and peripheral EU countries in particular). It was also found that there is no unified pattern of the associations between the relevance of equity financing and SMEs performance and characteristics, thus these associations seem to be influenced by the country-specifics as well.

EMS Application in Businesses – Systematic Review

“…Bases on the ascertainment as stated above, we can gather that the papers analyzed pointed out the following problems associated with EMS implementation in SMEs: cost savings in long-term sustainable practices (Balanovska et al, 2019), necessity of gaining a competitive edge as a result of EMS implementation (Campos, 2012), insufficient knowledge concerning environmental consequences (Johnstone, 2020a), need for formal environmental regulation (Chan, 2011), strengthening business reputation of the enterprise owing to environmental compliance (Teriö & Kähkönen, 2011), unclear ethical benefits ensuing from environmental compliance and need for clear definition of "green" responsibility (Zorpas, 2010), difficult EMS administration (Balanovska et al, 2019), need for schooling on environmental issues (Ammenberg & Hjelm, 2003), gaining new clients based on improved environmental image (Taylor & Murphy, 2004), inter-business cooperation in environmental problems (Hai, 2008), high expenses associated with EMS implementation (Wieczorek-Kosmala et al, 2020).…”