Title: Access to finance and labor market performance in the EU 28
Authors: FERENT-PIPAS MARINADE PEDRAZA GARCIA PABLO
Publisher: Publications Office of the European Union
Publication Year: 2019
JRC N°: JRC118365
ISBN: 978-92-76-12575-4 (online),978-92-76-12576-1 (print)
ISSN: 1831-9424 (online),1018-5593 (print)
Other Identifiers: EUR 29926 EN
OP KJ-NA-29926-EN-N (online),KJ-NA-29926-EN-C (print)
URI: https://publications.jrc.ec.europa.eu/repository/handle/JRC118365
DOI: 10.2760/97382
10.2760/407449
Type: EUR - Scientific and Technical Research Reports
Abstract: This paper examines the relationship between access to finance and labor market performance in the EU28 for the period 2003-2017. For this purpose, we first construct a composite indicator to measure access to finance by equal-weighting information about days needed to be paid, rejected loans, the willingness of banks to provide a loan, interest rate for small loans, venture capital, private equity, business angels, and public funding. Secondly, using a Two-Stage Least Squares (2SLS), we estimate the relationship between the employment and unemployment growth rates on our access to finance indicator while controlling for main macro-economic variables. Our results suggest that improved access to finance is likely to stimulate labor market performance - increased access to finance generates increased employment growth rates, and decreased unemployment growth rates respectively. Findings contribute to empirical literature and have important policy implications. Improving business environment conditions for SMEs through access to finance could improve labor market outcomes.
JRC Directorate:Joint Research Centre Corporate Activities

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