Small business investment sensitivity of debt before and during the global crisis

Available online on the publisher's website: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I2-P109.pdfInternational audienceThis article aims at studying the influence of debt on small business investment in a European context, i.e. France. The empirical findings, robust to the endogeneity analysis, lead to several interesting results. In particular, credit institutions privilege corporate manager monitoring before the recent crisis, especially for low growth firms. They limit the scope of this monitoring in favor of a higher restriction of debt access during the crisis period. To cope with this constraint, small businesses tend to intensify the use of internal financial resources. These results, although coherent with the disciplinary role of debt stipulated by agency theories of corporate leverage, moderate the magnitude of this role according to the global crisis effect