Getting left behind? The localised consequences of exclusion from the credit market for UK SMEs

Marc Cowling, Ross C. Brown*, Weixi Liu, Augusto Rocha

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)
2 Downloads (Pure)

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 languageEnglish
Number of pages19
JournalCambridge Journal of Regions, Economy and Society
VolumeAdvance Articles
Early online date19 Oct 2023
DOIs
Publication statusE-pub ahead of print - 19 Oct 2023

Keywords

  • SMEs
  • Credit markets
  • Scarring
  • Sub-Regional
  • Jobs

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