The role of guarantees to access financial markets: A study of Italian companies

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Abstract

Access to credit in agriculture pursues the important objective of allowing the development of the agricultural sector. In recent years the need for a new paradigm rises. It aims for sustainable finance in agriculture and uses of guarantee instruments in order to mitigate risks, lower costs, and expand the opportunities for access to credit. This article aims to analyze the guarantee instruments available on the Italian financial market in relation to several variables including sector, size, age, and geographical location of the company. From an analysis of the sample of data on the guarantees provided by ISMEA (Italian Service Institute for the Agri-Food Market), emerges the presence of territorial disparities in the use of guarantees, more widespread in northern Italy, and a higher cost of debt for micro-enterprises and for funds dedicated to innovation. Research results are in line with previous research that points out the importance of guarantees to reduce financial risks and increase access to bank financing. The paper contributes to the existing research in this field by analysing the effect of guarantees on the cost of debt and by suggesting an increase in the use of these instruments in some sectors and in some areas of Italy.

Keywords: Agriculture, Public Guarantees, Access to Credit, Cost of Debt, Funding Options

Authors’ individual contribution: Conceptualization – L.M., R.M., and R.S.; Methodology – L.M., R.M., and R.S.; Formal Analysis – L.M., R.M., and R.S.; Resources – L.M., R.M., and R.S.; Writing – Original Draft – L.M., R.M., and R.S.; Writing – Review & Editing – L.M., R.M., and R.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: Q14, Q18, G23, G28

Received: 23.08.2020
Accepted: 09.11.2020
Published online: 11.11.2020

How to cite this paper: Martiniello, L., Marcello, R., & Savio, R. (2020). The role of guarantees to access financial markets: A study of Italian companies [Special issue]. Corporate Ownership & Control, 18(1), 292-300. https://doi.org/10.22495/cocv18i1siart5