Beyond Subsidies: A Study of Sustainable Public Subordinated Debt in Spain
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Beyond Subsidies: A Study of Sustainable Public Subordinated Debt in Spain

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Beyond Subsidies: A Study of Sustainable Public Subordinated Debt in Spain

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dc.contributor.author Bustos Contell, Elisabeth
dc.contributor.author Labatut Serer, Gregorio
dc.contributor.author Ribeiro-Navarrete, Samuel
dc.contributor.author Climent Serrano, Salvador
dc.date.accessioned 2019-03-11T09:49:51Z
dc.date.available 2019-03-11T09:49:51Z
dc.date.issued 2019
dc.identifier.uri http://hdl.handle.net/10550/69481
dc.description.abstract Evidence from business shows that small- and medium-sized enterprises (SMEs) are fragile. They suffer from a high mortality rate that primarily owes to difficulties in securing financing as a result of major information asymmetries. Despite these difficulties, SMEs provide the economic backbone of all economically developed countries. Aware of the key role of SMEs in national economic stability and of the financial problems that SMEs face, governments have designed a range of financial and tax measures to protect them. These financial measures include a highly specific form of public financing called subordinated debt. This concept refers to debt with the lowest credit seniority, just before equity. Subordination makes sense when companies go into liquidation because subordinated debt creditors are the last creditors to receive repayment, making recovery of this debt virtually impossible. Therefore, the risk borne by lenders of subordinated debt is similar to that of shareholders of the borrowing firm. This paper presents an ordinary least squares regression model to estimate the cash flows of SMEs financed by public subordinated debt. This provides public authorities with a tool to estimate the ability of SMEs to repay their debt and to thereby ensure that public subordinated debt financing is sustainable.
dc.language.iso eng
dc.relation.ispartof Sustainability, 2019, vol. 11, num. 4, p. 1-7
dc.rights.uri info:eu-repo/semantics/openAccess
dc.source Bustos Contell, Elisabeth Labatut Serer, Gregorio Ribeiro-Navarrete, Samuel Climent Serrano, Salvador 2019 Beyond Subsidies: A Study of Sustainable Public Subordinated Debt in Spain Sustainability 11 4 1 7
dc.subject Deute
dc.subject Finances públiques
dc.title Beyond Subsidies: A Study of Sustainable Public Subordinated Debt in Spain
dc.type info:eu-repo/semantics/article
dc.date.updated 2019-03-11T09:49:52Z
dc.identifier.doi https://doi.org/10.3390/su11041049
dc.identifier.idgrec 130292

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