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TitleSupply chain finance and SMEs: evidence from international factoring data
AuthorMarc Auboin; Harry Smythe ; Robert Teh
Date of Publication2016
PublisherAfreximbank, Factors Chain International (FCI)
Number of Pages31 pages
Geographical CoverageAfrica, International
Keywordssmall and medium-sized enterprise (SMEs), Trade and Finance, Global Supply Chains, Financial crisis, World Trade Organization
AbstractThe unbundling of trade across countries oers unique opportunities for SMEs to integrate into global trade notably through their involvement in supply chains. With supply chains expanding into new regions of the world, the challenge for SMEs to obtain access to nance remains an important one. In many developing and emerging market economies, the capacity of the local nancial sector to support small traders is limited. Moreover, after the nancial crisis, a number of global banks have "retrenched", for various reasons. In this context, supplychain nance arrangements, and other alternative forms of nancing such as through factoring, have proven increasingly popular among traders.This paper shows that factoring, in countries in which it is available, boosts SMEs' ability to participate in international trade. Factoring also appears to be employed by rms involved in global supply chains. For the rst time, we are able to use data on factoring for the period of 2008-2015 from Factor Chain International (FCI), which collects the most extensive data on factoring available at the moment.Using an instrumentation strategy, we are able to identify a strong, signicant eect of factoring on the ability of SMEs, from some of the main traders in the world, to expand their trade.
Copyright HolderAfreximbank
Copyright URL
Filesize255421 MB
File FormatPDF
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