Abstract
Recent research has identified a key subset of the business population that comprises firms who had sought external finance but subsequently withdrew from the credit market completely despite still requiring finance. Utilising the UK's Longitudinal Small Business Survey between 2015 and 2020, we identify the consequences in terms of lost jobs and sales of these small- and medium-sized enterprises (SMEs) dropping out of the credit market for finance. We conduct our analysis at the regional and sub-regional level and found that around 230,000 SMEs have dropped out of the UK credit market and that in many localities this has reduced job creation and sales income growth. We conclude that this exclusionary borrowing behaviour will add further to existing regional and sub-regional economic inequalities in the UK, making the 'levelling up' agenda a very elusive policy objective.
| Original language | English |
|---|---|
| Article number | rsad033 |
| Pages (from-to) | 181-200 |
| Number of pages | 20 |
| Journal | Cambridge Journal of Regions, Economy and Society |
| Volume | 17 |
| Issue number | 1 |
| Early online date | 19 Oct 2023 |
| DOIs | |
| Publication status | Published - 1 Mar 2024 |
Bibliographical note
They also wish to acknowledge the very helpful and constructive comments received from the peer reviewers. However, the views in the paper are strictly those of the authors alone. The usual disclaimer applies.Funding
The authors wish to acknowledge the funding they received for the project from the Economic and Social Research Council (ESRC) grant number ES/W010259/1.
| Funders | Funder number |
|---|---|
| Economic and Social Research Council | ES/W010259/1 |
Keywords
- SMEs
- credit markets
- jobs
- scarring
- sub-regional
ASJC Scopus subject areas
- Geography, Planning and Development
- Economics and Econometrics
- Sociology and Political Science
