Estimating an SME investment gap and the contribution of financing frictions. ESRI WP589, March 2018

In this paper, we use firm-level survey data to explore the determinants of SME investment activity and the extent to which observed investment is in line with that suggested by economic fundamentals. In contrast to previous literature which has focused on whether investment gaps exist at a more aggregate level, we find evidence that for SMEs actual investment is below what would be expected given how companies are currently performing. The estimated magnitude of this investment gap is economically meaningful at just over 30 per cent in 2016. We explore the extent to which the gap is explained by financial market challenges such as access to finance, interest rates, and the availability of collateral. Financing frictions are found to account for a moderate share of the overall investment gap (between 10 per cent and 20 per cent of the gap)

Novel integrated paired emitter-detector diode flow analysis system

My PhD programme of research at the National Centre of Sensor Research has focussed on the development of a miniaturized detection system based on the concept of a Paired Emitter-Detector Diode (PEDD) LED optical sensor as a generic optical sensor platform for colorimetric analysis as developed within the research group. This research was funded by Science Foundation Ireland (SFI). This novel optical sensor employs two LEDs, operating one as a light source and the other as a light detector. The emitter LED is forward biased and the detector reverse biased. A simple timer circuit measures the time taken for the photocurrent generated by the emitter LED to discharge the detector LED from 5 V (logic I) to 1.7 V (logic 0). PEDDs of various wavelengths and designs were investigated and initially calibrated using pH indicator dyes. The PEDD has been applied as an inexpensive detector in a flow-injection system for determining low concentration levels of phosphate employing the malachite green spectrophotometric method. The novel flow detector employed within this manifold is a highly sensitive, low cost, miniaturized light emitting diode (LED) based flow detector, which achieved an improved LOD in comparison to a LED-photdiode sensor. The PEDD has also been applied as a photometric detector in HPLC. Separation of transition metal ions, manganese (11) and cobalt (11) were carried out using a Nucleosil 100-7 (functionalised with IDA groups) column. The PEDD was calibrated using Mn (11) and Co (11) PAR complexes providing a linear response. Higher sensitivity and improved precision were obtained from the PEDD compared to the commercially available UV-vis variable wavelength detector

Photometric detection in flow analysis systems using integrated PEDDs

A novel inexpensive optical-sensing technique has been developed for colorimetric flow analysis. This sensing system employs two LEDs whereby one is used as the light source and the other as a light detector. The LED used as light detector is reverse biased with a 5-V supply so that the photocurrent generated by the incident light discharges the capacitance. Direct digital output is provided by a simple timer circuit that measures the time taken for this discharge process from 5 V (logic 1) to 1.7 V (logic 0). This sensing concept has been applied in flow analysis by constructing an optical flow cell with a pair of LEDs. Calibration of the integrated optical flow cell using a dye resulted in a linear response that obeys the Beer–Lambert law. The flow rate, dynamic range, sensitivity and limits of detection were investigated. The system was also used for pH determination in the range of pH 2.5–6.8 using bromocresol green (BCG). The pKa of BCG was successfully determined by this technique

Detection of nitrite by flow injection analysis using a novel paired emitter-detector diode (PEDD) as a photometric detector

An inexpensive flow injection analysis system for determining low concentration levels of nitrite employing the Griess reagent spectrophotometric method is reported. The novel photometric detector applied within this manifold is a highly sensitive, low cost, miniaturized light emitting diode (LED) based flow detector. This colorimetric detector employs two LEDs, operating one as a light source and the other as a light detector. The emitter LED is forward biased and the detector reverse biased. The emitter and detector LED had a λmax of 530 nm and 623 nm respectively. The emission spectrum of the emitter LED efficiently overlapped with the absorbance spectrum of 9 µM NO2 and Griess reagent complex. A simple timer circuit measures the time taken for the photocurrent generated by the emitter LED to discharge the detector LED from 5 V (logic 1) to 1.7 V (logic 0). The Griess reagent method employed for nitrite determination is based on the formation of an azo dye, the intensity of which is directly related to nitrite concentration. The linear range, reproducibility and limit of detection were investigated. Detection limits in the nanomolar range were achieved using the Paired Emitter-Detector Diode (PEDD) flow analysis device. For a comparative study the linear range and limit of detection were also investigated using a platewell reader. Higher sensitivity and improved precision were obtained from the PEDD compared to the commercially available plate well reader

Financial Structure and Diversification of European Firms. ESRI WP492, September 2014

Small and medium enterprises have been shown to rely mainly on banks for funding and, unlike larger firms, rarely have direct access to capital markets. This paper looks at the extent to which SMEs avail of a wider range of funding options and how their use differs across firms and countries. Using the Survey of Access to Finance in Europe (SAFE) covering sixteen Euro Area countries, we find that firms are currently using two or three sources of finance to fund their firm’s operations and have had previous experience of other types of funding. There are some noticeable differences across countries with funding types in peripheral economies generally being less diversified. Differences across firm size and age groups are more marked than cross-country variation, with smaller and younger firms significantly more reliant on a limited set of finance types and older, larger firms having more diversified financial structures. Looking at individual sources of financing, we find that trade credit and informal sources of finance are extremely prevalent across all countries, with Irish firms being particularly likely to use them as sources of funding

SME Recovery Following a Financial Crisis: Does Debt Overhang Matter?. ESRI WP491. September 2014

The years before the financial crisis saw a dramatic build-up in private debt levels in several countries and this increase was particularly marked in Ireland. In this paper, we look at whether outstanding debt taken out by small and medium sized enterprises in Ireland constrains current performance. We find that the level of debt is generally associated with positive firm performance, facilitating growth and investment. Higher debt burdens (measured as the ratio of debt to turnover), on the other hand, have significant negative effects on all measures of firm performance, in particular investment, employment and indicators of financial distress

Cost of doing business during COVID-19: SME investment in public health compliance. ESRI Working Paper No. 701 May 2021.

In this paper, we use a novel survey module to consider investment in health-related expenditures by SMEs following the onset of the COVID-19 pandemic in Ireland. Using a unique dataset designed to capture expenditure on public health measures, we explore the heterogeneity in expenditure across firms and explore its determinants using traditional models. We find that 86 per cent of SMEs invested in health measures with a mean investment of =C15,500 and a median of =C3,500. Nearly all investment was financed by internal funds. Health investments are uncorrelated with economic performance and financial factors, in contrast to traditional models of investments. This highlights the random nature of the COVID-19 shock

Paired emitter-detector diode detection with dual wavelength monitoring for enhanced sensitivity to transition metals in ion chromatography with post-column reaction

The combination of post-column derivatisation and visible detection are regularly employed in ion chromatography (IC) to detect poorly absorbing species. Although this mode is often highly sensitive, one disadvantage is the increase in repeating baseline artifacts associated with out-of-sync pumping systems. The work presented here will demonstrate the use of a second generation design paired emitter-detector diode (PEDD-II) detection mode offering enhanced sensitivity to transition metals in IC by markedly reducing this problem and also by improving signal noise. First generation designs demonstrated the use of a single integrated PEDD detector cell as a simple, small (15 x 5 mm), highly sensitive, low cost photometric detector for the detection of metals in ion chromatography (IC). The basic principle of this detection mode lies in the employment of two linear light emitting diodes (LEDs), one operating in normal mode as a light source and the other in reverse bias serving as a light detector. The second generation PEDD-II design showed increased sensitivity for Mn(II)- and Co(II)-2-(pyridylazo) resorcinol (PAR) complexes as a result of two simultaneously acquiring detection cells - one analytical PEDD cell and one reference PEDD cell. Therefore, the PEDD-II employs two wavelengths whereby one monitors the analyte reaction product and the second monitors a wavelength close to the isosbestic point. The optimum LED wavelength to be used for the analytical cell was investigated to maximise peak response. The fabrication process for both the analytical and reference PEDD cells was validated by determining the reproducibility of detectors within a batch. The reproducibility and sensitivity of the PEDD-II detector was then investigated using signals obtained from both intra- and inter-day chromatograms

The determinants of SME capital structure across the lifecycle. ESRI WP614, February 2019

While differences in capital structure between large and small firms have been extensively researched, relatively less empirical evidence is available explaining cross country differences in the capital structure of SMEs over the life cycle. This is an important gap as many of the theoretical predictions on financing requirements and access can be linked to firm age. In this paper, we explore the determinants of SME capital structure across the age distribution of firms using firm-level panel data for 15 European countries. Our key findings demonstrate the existence of a non-linear relationship between age and capital structure that differs markedly across countries. We also find that firm level collateral and liquidity play a role in determining the age-debt relationship. Finally, we find that the age-debt relationship depends on the country level financial structure with more stock market financing reducing firm leverage disproportionately for young firms while foreign bank lending and bank concentration both increase firm leverage across the lifecycle

COVID-19 pandemic and SMEs revenues in Ireland: What’s the gap? ESRI QEC Special Article September 2020.

New ESRI research has found two-in-five micro-sized firms and one-in-two small and medium-sized firms faced a revenue shortfall in the main COVID-19 lockdown period from March to June 2020