Small firm finance is a value chain governance issue: new evidence from Latin America. (2015)

• Record Type: Journal Article
• Authors: Navas-Alemán, Lizbeth; Pietrobelli, Carlo; Kamiya, Marco
• Is Part Of: International journal of technological learning, innovation and development. Volume 7:Number 3(2015)
• Page Start: 218
• Page End: 243
• Publication Date: 2015
• Subjects: global value chains -- SME finance -- small and medium-sized enterprises -- SMEs -- relationship finance -- Brazil -- Costa Rica -- Argentina -- inter-firm linkages -- coordination -- governance -- value chain financing -- agro-industry -- agriculture -- furniture industry -- ICT industry -- financial mechanisms -- access to finance; Organizational learning -- Periodicals; Technological innovations -- Economic aspects -- Periodicals; Industrial organization -- Technological innovations -- Developing countries -- Periodicals; Diffusion of innovations -- Developing countries -- Periodicals; 338.064091724
• Languages: English
• ISSNs: 1753-1942

Abstract

The literature on small and medium-sized enterprises (SME) finance suggests that linkages with large firms in value chains can improve access to credit. This exploratory paper looks at inter-firm linkages and SMEs access to finance and draws on the value chain literature regarding issues of coordination and governance. Using original enterprise-level data (agro-industry in Argentina, furniture in Brazil and ICT in Costa Rica), we compare sources of value chain finance and discuss the role of financial mechanisms based on 'hard data' and relationship finance. Findings confirm the importance of value chain financing and the role of governance in SMEs' access to finance.