THE INCIDENCE OF THE REGIONAL ENVIRONMENTS ON THE FINANCIAL RESTRICTIONS IN SMALL AND MEDIUM ENTERPRISES

This paper highlights the role of the regional heterogeneity in the financial constraints of small and medium enterprises (smEs). To do this, we develop an empirical application based on a sample of Spanish smEs and propose a model of financial access that distinguishes between two regions. We obtain estimates using dynamic probit models with panel data. Our results confirm the relevance of including regional differentiation. In particular, we find that in the less developed region, the specific characteristics of smEs are not as important in determining the likelihood of their being financially constrained as the actual conditions in the region where the company is located.