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

Marc Cowling, Ross Brown, Weixi Liu, Augusto Rocha

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

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 2015-2020, 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.
Original languageEnglish
Article numberrsad033
Pages (from-to)181-200
JournalCambridge Journal of Regions, Economy and Society
Volume17
Issue number1
Early online date19 Oct 2023
DOIs
Publication statusPublished - 1 Mar 2024

Keywords / Materials (for Non-textual outputs)

  • SMEs
  • credit markets
  • scarring
  • sub-regional
  • jobs

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