The geography of Swedish SMEs' investments Financial constraints across the urban-rural hierarchy in a wealthy country with low regional disparities

This paper advances our knowledge of the spatial determinants of productivity by empirically demonstrating one such mechanism - clear differences along the urban-rural continuum in the sensitivity of SMEs' investments to own cash flow. Whereas the literature has established uneven availability...

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1. Verfasser: Andersson, Martin (VerfasserIn)
Weitere Verfasser: Eklund, Johan E.. (MitwirkendeR), Tsvetkova, Alexandra (MitwirkendeR)
Format: Elektronisch E-Book
Sprache:English
Veröffentlicht: Paris OECD Publishing 2020
Schriftenreihe:OECD Regional Development Working Papers
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520 |a This paper advances our knowledge of the spatial determinants of productivity by empirically demonstrating one such mechanism - clear differences along the urban-rural continuum in the sensitivity of SMEs' investments to own cash flow. Whereas the literature has established uneven availability of credit across space, the evidence on whether this translates into differences in actual business investments remains scarce. We answer this question in the context of Sweden - a highly digitalised country with low regional inequalities. We find that the world of financing is not yet flat for the majority of Swedish SMEs. Companies located in non-metro regions are most dependent on own cash flow in their investments. The results hold for all firms, firms of different sizes, firms operating in low-end services, unaffiliated firms and those belonging to domestic corporations. In contrast, investment - cash flow sensitivity of firms operating in high-tech services and those belonging to a multinational enterprise does not differ geographically. On average, regional investment-cash flow sensitivity is lower in bigger, denser and more educated local labour market regions; it is higher in regions with greater concentration of SMEs 
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spellingShingle Andersson, Martin
The geography of Swedish SMEs' investments Financial constraints across the urban-rural hierarchy in a wealthy country with low regional disparities
Urban, Rural and Regional Development
Sweden
title The geography of Swedish SMEs' investments Financial constraints across the urban-rural hierarchy in a wealthy country with low regional disparities
title_auth The geography of Swedish SMEs' investments Financial constraints across the urban-rural hierarchy in a wealthy country with low regional disparities
title_exact_search The geography of Swedish SMEs' investments Financial constraints across the urban-rural hierarchy in a wealthy country with low regional disparities
title_full The geography of Swedish SMEs' investments Financial constraints across the urban-rural hierarchy in a wealthy country with low regional disparities Martin Andersson, Johan E. Eklund and Alexandra Tsvetkova
title_fullStr The geography of Swedish SMEs' investments Financial constraints across the urban-rural hierarchy in a wealthy country with low regional disparities Martin Andersson, Johan E. Eklund and Alexandra Tsvetkova
title_full_unstemmed The geography of Swedish SMEs' investments Financial constraints across the urban-rural hierarchy in a wealthy country with low regional disparities Martin Andersson, Johan E. Eklund and Alexandra Tsvetkova
title_short The geography of Swedish SMEs' investments
title_sort the geography of swedish smes investments financial constraints across the urban rural hierarchy in a wealthy country with low regional disparities
title_sub Financial constraints across the urban-rural hierarchy in a wealthy country with low regional disparities
topic Urban, Rural and Regional Development
Sweden
topic_facet Urban, Rural and Regional Development
Sweden
url https://doi.org/10.1787/a51319fe-en
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