Getting left behind? The localised consequences of exclusion from the credit market for UK SMEs
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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.
Cowling , M , Brown , R C , Liu , W & Rocha , A 2023 , ' Getting left behind? The localised consequences of exclusion from the credit market for UK SMEs ' , Cambridge Journal of Regions, Economy and Society , vol. Advance Articles . https://doi.org/10.1093/cjres/rsad033
Cambridge Journal of Regions, Economy and Society
Copyright © The Author(s) 2023. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/ licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
DescriptionFunding: 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.
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