Abstract
Matter of interest is the financing policies adopted by Italian SMEs to sustain their business cycles and competitive strategies; more specifically, the paper attempts to verify the role played by the “mini-bond”, a financing instrument introduced in 2012 by the Italian government. So, this paper can be framed in the part of the wide financial literature that examines the financing decisions of SMEs. In this field, it provides a contribution in this field by analyzing the impacts on the financing policy and choices, generated by the introduction of new and alternative financial instruments. Therefore, focusing on the Italian context, the research analyses whether the mini-bonds have actually triggered variations in capital structure, solvency and profitability of Italian SMEs that have issued mini-bond. After having considered trends and statistics about the mini-bond market, the paper examines the effects of financial policies adopted by Italian companies that tapped the bond market in the last 7 years. The analysis is based on a dataset extracted from database AIDA; this dataset includes accounting data and financial ratios taken from financial statements of Italian SMEs that issued mini-bond between 2012-2016. The research covers a sample of 246 Italian companies and focuses on their accounting ratios related to financial leverage, solvency, and profitability. Considering the variation between the years before and after the issues for each of 12 considered ratios, we measured average, median and standard deviation of variations to analyze the financial behaviour of SMEs in the sample. This research framework is slightly different from previous researches because, to correctly interpret the average variations, we carried out a preliminary significance check using the Student distribution, and we observed the coherence between average and median, also considering if positive variations were less or more than negative ones. The main results we obtain are that mini-bonds have: an impact on the issuer’s capital structure, with clear impacts on the level and maturity of indebtness; a positive influence on the short-term solvency level of the issuers.
Highlights
The recent financial crisis and its impacts on the real economy in European countries, provide an opportunity to contribute to the literature on financing policies and bond financing of Small and Medium-sized Enterprises (SMEs)
We considered all the “Italian Report on Mini-Bond”, list, we collected from the database AIDA (Boureau Van Dick)[28] the accounting data and the financial ratios covering a period of 6 fiscal years
The aim of this paper is to evaluate whether emissions of mini-bond influenced financial equilibrium and returns of Italian SMEs
Summary
The recent financial crisis and its impacts on the real economy in European countries, provide an opportunity to contribute to the literature on financing policies and bond financing of Small and Medium-sized Enterprises (SMEs). In the OECD area, SMEs generate around 60% of total employment and 50% to 60% of value added on average (OECD, 2018); in EU area, more than 99% of all firms are SMEs, that account for the large majority of employment, with an average share of 66,9% for EU 28 countries, and peaks of up to 79,6% for Italy (Barba Navaretti et al, 2015). Companies with less than 250 employees account for about 76% of the total in terms of added value, about 10% more than the average of the EU countries. Micro-enterprises, with less than 10 employees, make a difference: in Italy, they are about 4.3 million and employ about 13 million people (47% of the total, 29% in the European average)
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