Venture capital support to small businesses

Supplementary Appendices 1-3 to report published by National Audit Office (HC: 23, 2009-10; ISBN: 9780102963304)This report looks at the Department’s programme of venture capital funds which 2 support small businesses seeking equity based finance. The scope of the report does not include Government provision of debt finance or tax incentives for small businesses, nor does it attempt to look in detail at “investment readiness” programmes within Government which assist small businesses in preparing their business plans so that they can pitch their propositions to investors more effectively.The National Audit Office commissioned Professor Gordon Murray supported by Dr Louis Liu of Exeter University to undertake a data collection exercise to allow the National Audit Office to understand the extent of publicly sponsored venture capital programmes in other countries

Pension Funding Constraints and Corporate Expenditures

Working paperThis paper examines the effect of a company’s pension contributions on its dividend and investment policies. Using a sample of all FTSE350 UK listed firms with at least one defined benefit pension scheme from 2001 to 2004, we find a strong and negative relation between pension contributions and corporate dividend payments even after controlling for the correlation between funding status and unobserved investment opportunities. We find a weaker result using investment equations, where investment is negatively related to pension contributions but the relation is not statistically significant. Our results suggest a preference of financial rather than real channels for firms making balance sheet adjustments. We also examine whether the new funding requirements under the Pensions Act 2004 have had any effects on firms’ pension contributions and accordingly their corporate expenditure decisions. We include additional data from 2005-2006, and find that both dividend and investment sensitivity to pension contributions is more pronounced after the introduction of the new funding requirements

Has previous loan rejection scarred firms from applying for loans during Covid-19?

The concept of the ‘discouraged’ borrower is well documented. In this paper we consider whether smaller firms in the UK who have been previously rejected for bank loans have been scarred by the experience so badly that even in the presence of two exceptionally generous Covid-19 loan guarantee schemes they still refuse to make an application. Further, we also consider what happens when they do. As banks have either zero or minimal loss exposure, do they still maintain their normal strict lending protocols or do they relax their standards to fulfil the governments’ objective of supporting struggling businesses through the crisis? Our findings show that 72% of previously rejected borrowers are reluctant to request loans. We find some evidence that previously scarred firms faced such severe liquidity problems that they relaxed their distrust of banks during the Covid-19 crisis. However, their share of the governments guaranteed loan portfolio was slightly lower suggesting that banks were treating each new loan application on its merits.N/

EDIS: Entity-Driven Image Search over Multimodal Web Content

Making image retrieval methods practical for real-world search applications requires significant progress in dataset scales, entity comprehension, and multimodal information fusion. In this work, we introduce \textbf{E}ntity-\textbf{D}riven \textbf{I}mage \textbf{S}earch (EDIS), a challenging dataset for cross-modal image search in the news domain. EDIS consists of 1 million web images from actual search engine results and curated datasets, with each image paired with a textual description. Unlike datasets that assume a small set of single-modality candidates, EDIS reflects real-world web image search scenarios by including a million multimodal image-text pairs as candidates. EDIS encourages the development of retrieval models that simultaneously address cross-modal information fusion and matching. To achieve accurate ranking results, a model must: 1) understand named entities and events from text queries, 2) ground entities onto images or text descriptions, and 3) effectively fuse textual and visual representations. Our experimental results show that EDIS challenges state-of-the-art methods with dense entities and a large-scale candidate set. The ablation study also proves that fusing textual features with visual features is critical in improving retrieval results

Optimization study on longitudinal joints in quasi-rectangular shield tunnels

Featured Application: (1) The damage process of the newly adopted type of longitudinal joint with ductile iron joint panels (DIJPs) in quasi-rectangular tunnels was obtained. (2) The effect of bolt position improvements was investigated through joint tests. (3) Within the service conditions, the joint behavior could be divided into three stages under both positive and negative moments. (4) Effects of the modifications related to concrete and bolt properties were explored. (5) Through comparison, increasing the lever arm between bolts and the compression zone to resist exerted moments is believed to be the most effective optimization method. There are large bending moments in quasi-rectangular shield tunnels due to their deviation from the circular shape, and as for other types of shield tunnels, the longitudinal joints are the most critical parts in the lining structure. A new type of joint with ductile iron joint panels (DIJPs) was installed in quasi-rectangular tunnels to solve these problems. The distance from the bolts to the segment's inner surface was improved for better performance under specific bending moment types. Both tests and finite element modeling (FEM) simulations were conducted to investigate the effect of the bolt position improvements. The resistances to crack appearance increased by 33.6% and 18.0% for positive and negative moment cases, respectively. The resistances to crack penetration increased by 13.8% and 18.4% for positive and negative cases. From the FEM approach, it was found that the behavior of the joint under the design bending moment range can be divided into three stages, whereby the bolts are only active from the second stage on. The effects of other optimizing methods, such as enhancement of concrete properties and increase of bolt diameters and numbers, are explored. Through comparison, it is believed that optimizing the joint section to increase the lever arm between bolts and the compression zone can improve the joint behavior most effectively. This optimization direction is recommended when designing a shield tunnel joint with DIJPs

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

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.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.Publisher PDFPeer reviewe

Financing small and innovative firms during Covid-19

Previous research on the financing of smaller innovative firms has established that being small per se creates problems in accessing finance, but being small and innovative adds another layer of difficulty. This new research explicitly questions whether the Covid-19 crisis has added to the debt access problems of an already disadvantaged group of firms. Using a unique Covid-19 period dataset of 9,000 UK SMEs, we find that the most innovative firms had the highest demand for loans during the Covid-19 crisis and evidence that those firms trying to introduce new products and services faced more severe borrowing constraints. As the vast majority of Covid-19 loans in the UK were government guaranteed, we also find that several classes of innovative firms found it more difficult to access government supported loans. It was also not the case that those most impacted by the crisis had the most privileged access to government loan schemes despite a greater need for liquidity. These findings have potential implications for financing innovative firms in the post-Covid-19 world, such as proposing a specific innovation loan guarantee scheme with higher than conventional guarantee rates

Organizational capabilities and SME exports:the moderating role of external funding intentions and managerial capacity

Entry to export markets can stimulate business growth, yet remarkably few small- and medium-sized enterprises (SMEs) pursue export strategies. Using data gathered from the UK Small Business Surveys and a theoretical framework that combines principles from the resource-based view of the firm with notions of “investment readiness” and “managerial capacity,” we examine the empirical relationships between new product development (NPD) and new market entry (NME) capabilities on UK SMEs export decisions. Among other things, we find that there are contexts in which SMEs should develop these capabilities concurrently and others in which they should develop them independently to minimize added managerial complexity. Our results also indicate that in the absence of strong managerial capacity, SMEs should prioritize NME over NPD capabilities. Our findings produce several interesting theoretical and practical implications for SME exports