The Role of Loan Guarantee Schemes in Alleviating Credit Rationing in the UK

It is a widely held perception, although empirically contentious, that credit rationing is an important phenomenon in the UK small business sector. In response to this perception the UK government initiated a loan guarantee scheme (SFLGS) in 1981. In this paper we use a unique dataset comprised of small firms facing a very real, and binding, credit constraint, to question whether a corrective scheme such as the SFLGS has, in practice, alleviated such constraints by promoting access to debt finance for small credit constrained firms. The results broadly support the view that the SFLGS has fulfilled its primary objective.credit rationing; small firms; entrepreneurship; debt finance

The "virtuous circle" of informal investment activity: evidence from the UK

Working paper dated May 2003This paper seeks to quantify the frequency, scale and demographic characteristics of informal investor activity in the UK over a three year period 1999-2001 using population survey data. 1.1 million informal investors invest £12.8 billion per annum. The 'typical' informal investor would appear to be a well educated, middle-aged male from a higher social class with direct experience of starting-up a business. The importance of multiple forms of entrepreneurial experience suggests the existence of a 'virtuous circle'. Successful entrepreneurs metamorphose into informal investors and become an important source of both finance and relevant experience to other, as yet, un-established entrepreneurs

Evaluation of the Danish Growth Fund: evaluation of activities, 2010–2012

Report commissioned by the Danish Ministry of Business and Growth.With this report, DAMVAD, professor Gordon Murray (UK) and professor Marc Cowling (UK) evaluate the activities of the Danish Growth Fund (DGF) from 2010 to 2012 on behalf of the Danish Ministry of Business and Growth. The evaluation seeks to address the objective of DGF to mitigate market failure and create socio-economic return in light of the development of DGF over time and international experience in this field.Danish Ministry of Business and Growt

What really happens to smaller businesses in a global financial crisis?

Research by Marc Cowling and colleagues examines what happens to smaller businesses in a time of economic crisis. They find that recessions do take their toll on the smaller business sector, but these effects appear relatively short lived in general and affect specific types of small businesses and entrepreneurs more than others

Study of the impact of Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) on company performance

Research reportThis study assesses the impact of Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) tax relief on the UK economy, and whether these interventions have been worthwhile. Overall, the findings indicate that EIS and VCT investments have had a positive effect on capacity building in recipient companies. However, in material terms, these effects remain very small. There is some limited evidence of a profit-enhancing effect. However, both schemes appear to be associated with differentials in performance depending on the size, age and sector of the recipient company

The Survival & Growth of ‘Adolescent’ High-Tech Firms In Germany and The UK, 1997-2003

Anglo-German Foundation for the Study of Industrial Societ

An independent econometric analysis of the “Innovation Investment Fund” Programme (IIF) of the Australian Commonwealth Government: findings and implications

An analysis of the firms funded by the IIF programme indicates that the programme is well focused and has provided material and relevant support to a significant number of early-stage enterprises from Australia’s science base. IIF supported portfolio firms are more likely to be early-stage investments, to be in receipt of follow-on finance, and to achieve a successful exit than comparator firms outside the IIF programme. However these supported firms are also more likely to fail than comparator firms in part because the programme focuses on genuinely early-stage and therefore risky firms. The programme has raised substantial finance for young and new knowledge based firms that would not have been available in the absence of this scheme. None the less, the VC funds supported have largely made modest returns which would not by itself attract long term private investment interest in Australia’s high technology entrepreneurs. The IIF Programme while important is unlikely to engender by itself a viable and flourishing VC industry in Australia. Thus, the objectives imposed on the programme are overly ambitious and do not reflect fully the highly challenging environment for early-stage VC investment across the developed world.In 2010 Professor Gordon Murray and his colleagues Professor Marc Cowling and Dr Weixi Liu were contracted by the Department of Innovation, Industry, Science and Research to undertake an econometric analysis of the Innovation Investment Fund (IIF) program

Small firms and Scottish clearing banks

Concern about the relationship between small firms and clearing banks has resurfaced periodically over many years. In 1991 it has again been prominent, receiving considerable media attention. There is no doubt that the issues raised by the relationship are potentially very significant for the future development of the Scottish economy and accordingly warrant detailed and careful consideration. With this sort of thing in mind, in July 1991 the Association of British Chambers of Commerce commissioned our survey of small firms in Southern England, the English Midlands and Scotland. We posted a questionnaire to 1500 Chambers of Commerce members. This paper examines the 73 responses from small firm customers of Scottish clearing banks. These responses are discussed in Section 3. Section 2 provides background information by briefly noting major issues of concern (1)