Acta Univ. Agric. Silvic. Mendelianae Brun. 2013, 61(4), 1005-1016 | DOI: 10.11118/actaun201361041005

The impact of financial and economic crisis on SME's in Greece and Ireland

Lubor Lacina1, Jan Vavřina2
1 Department of Finance, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic
2 Department of Business Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic

The impact of financial and economic crisis influencing economic development in EU countries is analysed predominately on macroeconomic level. Major part of economic studies analyse the effect of crisis on both real and potential economic growth, unemployment, inflation and debt dynamic. However the effects of the crisis are visible also at microeconomic level. The economic results of businesses are significantly influenced by the negative macroeconomic development at both national and international level. Both decrease in potential growth and purchasing power due to economic recession and more restrictive fiscal policy have a direct impact on aggregate demand and thus the microeconomic sector as whole. Additional source of problems is connected with banking sector crisis and the access to financing mainly for small and medium-sized enterprises (SME's). The aim of the paper is to fill the gap in economic research and to analyse the impact of the ongoing crisis on business entities in selected eurozone member countries. Authors selected two eurozone member countries from EU periphery (Greece and Ireland). Both countries are severely hit by economic crisis and authors suppose that also their business sector will be significantly influenced. However author believes that the structural differences will lead over the time in faster recovery of Irish businesses in contrast to the Greek one.
We create dataset using Amadeus database which contains the harmonized data about statistically significant set of business in selected countries. Authors then sorting the data according selected variables such as size of the company, NACE categorization and comparative indicators of individual business economic performance, namely representatives of indicators groups profitability, solvency, liquidity and indebtedness/financial structure of business entities. For the purpose of analysis authors analyse the data series three years before the crisis (2005, 2006 and 2007) and the three years of crisis (2008, 2009 and 2010). The dataset consists of 3,567 business entities in both observed countries. In the study we use the cluster analysis to detect some basic patterns and trends in business sector in terms of homogeneity within dataset. Based on the results of microeconomic environment analysis (impact of crisis and national economic policies) authors assess the optimal reaction of economic policy (both national and EU) to improve the condition of businesses which authors believe are the source of future economic recovery.

Keywords: economic crisis, financial analysis, eurozone, quantitative research, SME's, economic policy
Grants and funding:

This paper is part of the activities of Jean Monnet Centre of Excellence, Mendel University in Brno, Czech Republic (Grant Decision N° 2012-2861).

Received: April 25, 2013; Published: July 13, 2013  Show citation

ACS AIP APA ASA Harvard Chicago IEEE ISO690 MLA NLM Turabian Vancouver
Lacina, L., & Vavřina, J. (2013). The impact of financial and economic crisis on SME's in Greece and Ireland. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 61(4), 1005-1016. doi: 10.11118/actaun201361041005
Share...
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Bannock and Partners, 1997: Credit Guarantee Schemes for Small Business Lending: A Global Perspective. London: Graham Bannock and Partners, 106 p. Available online: http://cec.shfc.edu.cn/download/20100925104414_239846439874.pdf.
    2. COEURÉ, B., 2012: SME financing - a euro area perspective. Conference on Small Business Financing, jointly organised by the European Central Bank, Kelley School of Business at Indiana University, Centre for Economic Policy Research and Review of Finance, Frankfurt am Main, 13 December 2012. Available online: http://www.ecb.int/press/key/date/2012/html/sp121213.en.html.
    3. ECB, 2012: Survey on the access to finance of SMEs in the euro area (SAFE). Frankfurt am Main: European Central Bank, April 2013, 37 p. ISSN 1831-9998. Available online: http://www.ecb.int/pub/pdf/other/accesstofinancesmallmediumsizedenterprises201304en.pdf?8218c5db8ddced563a4db1fe2c23e411.
    4. EIM, 2011: Do SMEs create more and better jobs? Zoertemeer: EIM Business & Policy Research 169 p. Available online: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/supporting-documents/2012/do-smes-create-more-and-better-jobs_en.pdf.
    5. European Commission, 2012a: SBA Fact Sheet 2012 - Ireland. Brussels: Small Business Advisory Group. 13 p. Available online: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/ireland_en.pdf.
    6. European Commission, 2012b: SBA Fact Sheet 2012 - Greece. Brussels: Small Business Advisory Group. 14 p. Available online: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/greece_en.pdf.
    7. European Commission, 2013: Green paper: Long Term Financing of European Economy. Brussels: COM(2013) 150/2. 18 p. Available online: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0150:FIN:EN:PDF.
    8. HOLTON, S. et al., 2012: Firm credit in Europe: a tale of three crises. Research Technical Papers 04/RT/12, Central Bank of Ireland. 33 p. Available online: http://www.centralbank.ie/publications/Documents/04RT12.pdf.
    9. IMF, 2012: Ireland: Selected Issues. IMF Country Report No. 12/265. September 2012. 74 p. Available online: http://www.imf.org/external/pubs/ft/scr/2012/cr12265.pdf. Go to original source...
    10. KISLINGEROVÁ, E. et al., 2010: Manažerské finance. Praha: C. H. Beck. 811 p. ISBN 978-80-74000-194-9.
    11. KOLESNIKOVÁ, N., and LIU, Y., 2011: Jobless recoveries: causes and consequences. Federal Reserve Bank of St. Louis, Apr, 18-19. Available online: http://www.stlouisfed.org/publications/pub_assets/pdf/re/2011/b/jobless.pdf.
    12. LAWLESS, M. and McCANN, F., 2012: Determinants of Default: Evidence from a Sector-Level Panel of Irish SME Loans. CBI Research Technical Working Paper No. 3/RT/12, Central Bank of Ireland. 30 p. Available online: http://www.centralbank.ie/publications/Documents/03RT12.pdf.
    13. LEVITSKY, J., 1997: Credit Guarantee Schemes: An International Review. Small Enterprise Development, Vol. 8, 2: 4-17. Available online: http://siteresources.worldbank.org/EXTEXPCOMNET/Resources/2463593-1213887855468/04_Credit_guarantee_schemes_for_SMEs.pdf. DOI: 10.3362/0957-1329.1997.013 Go to original source...
    14. MAZARS, 2012: SME Lending Demand Study, July 2012.
    15. OECD, 2009: The Impact of the Global Crisis on SME and Entrepreneurship Financing and Policy Responses. Paris: OECD Centre for Entrepreneurship, SMEs and Local Development. Available online: http://www.finance.gov.ie%2Fdocuments%2Fpublications%2Freports%2F2011%2Fmazarbanklend.pdf&ei=qjOsUcikAYjxPKjzgPAJ&usg=AFQjCNFPVRDHsFs38pfZH5H35eO-aMPE1g&sig2=LdEdNOR7gt4sVaNpq3BcFA&bvm=bv.47244034,d.ZWU&cad=rja.
    16. SYNEK, M. et al., 2007: Manažerská ekonomika. Praha: Grada. 464 p. ISBN 978-80-247-1992-4.

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content