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Small shop survival – the financial response to a global financial crisis

Small shop survival – the financial response to a global financial crisis

Arrieta Paredes, Mary-Paz ORCID: 0000-0001-5632-394X, Hallsworth, Alan G. and Coca-Stefaniak, J. Andres ORCID: 0000-0001-5711-519X (2019) Small shop survival – the financial response to a global financial crisis. Journal of Retailing and Consumer Services, 53:101984. ISSN 0969-6989 (doi:https://doi.org/10.1016/j.jretconser.2019.101984)

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Abstract

Small and medium-sized enterprises (SMEs), many of which are small retail shops, remain the largest employer in the western world. Yet the financing of their fixed and working capital investments remains under-researched. This study focuses on this topic by examining Eurozone wholesale and retail SMEs enterprises at the peak of the 2008 financial credit crisis. In order to do this, an innovative analysis of existing theories in retail finance and policy research using generalized multilevel structural equation modelling is performed to establish how retail SMEs sourced capital during this period. This analysis, a first of its kind in wholesale and retail SME research, finds that pecking order theory, the independence of investment and financing, as well as the contest for financial resources between fixed and working capital do not hold for wholesale and retail SMEs. Moreover, it is found that government grants and subsidized loans were not used by SMEs in this sector of the Eurozone as primary sources of finance during the aftermath of the 2008 global credit crisis. Crucially, it is posited that a business environment characterized by stronger legal rights and deeper credit information did not improve SMEs’ access to external finance. The authors recommend that further research should be pursued in this field in order to improve current understanding of the resilience of retail SMEs for future global financial crises.

Item Type: Article
Additional Information: An example of intradisciplinary research published in a 4-star journal (SJR > 1.2) drawing from research in retail, finance and small business entrepreneurship.
Uncontrolled Keywords: SME retail, global financial crisis, European Union
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HG Finance
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Faculty of Business > Department of Marketing, Events & Tourism
Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA)
Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA) > Centre for Governance, Risk & Accountability (CGRA)
Faculty of Business > Networks and Urban Systems Centre (NUSC)
Faculty of Business > Networks and Urban Systems Centre (NUSC) > Connected Cities Research Group
Last Modified: 20 Dec 2019 13:23
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
URI: http://gala.gre.ac.uk/id/eprint/25832

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