IS THE INCREASE ON SMES’ ACCESS TO FINANCE IN THE CAPITAL MARKETS UNION CONTEXT REAL? AN EMPIRICAL INVESTIGATION

The aim of this paper is to identify whether small and medium enterprises, i.e. SMEs’ access to finance can increase given the context of Capital Markets Union (CMU) project. For this purpose, identifying the main drivers of SMEs’ access to different types of financing having the SMAF index as proxy is a matter of great importance. Based on a panel of sixteen European countries we have performed a threshold analysis via PSTR methodology that reveals some very interesting facts. First of all, we have found strong empirical evidence of a threshold effect with stock market capitalization as threshold variable when studying the dynamics of the SMAF index. When the capitalization is lower than 35.34%, a large series of macroeconomic variables like interest rate spreads, GDP per capita, inflation rate, unemployment or cost/revenues ratio generate a powerful influence when it comes to finance a SME. When stock market capitalization exceeds the threshold, a different story is narrated and the existence of other directions of influence is visible. Hence, our results suggest that the CMU project with all its initiatives and impact measures will not facilitate SMEs’ access to finance in developed capital markets with stock market capitalization below the threshold level of 35.34%.