• Does Spatial Proximity to Stock Exchanges enhance access to Funding to Small and Medium Enterprises?

    Author(s):

     Oro ufuo Oroa* and Imhotep Paul Alagidedeb 


    ou58oro@yahoo.com
    2024-08-01 04:49:59

    45 Downloads 100 Views

    Abstract

    Many researchers believe that in an economy where small and medium enterprises (SMEs) are well-funded, certain socioeconomic hurdles including poverty reduction, inclusive economic growth, equitable income distribution and economic diversification could be achieved. To boost funding to SMEs, countries create Alternative Securities Markets (second tier securities exchanges), called ASeM in Nigeria. The purpose of this study is to evaluate the viability of ASeM as fund provider to SMEs. Prior studies report that stock exchanges are space-sensitive in their service delivery. To provide insight into this spatial-proximity hypothesis, we use Logistic Regression Model and data from Nigeria. Our finding reveals that 1 Kilometer decrease in spatial-proximity to the exchange increases the odd of being listed on the exchange by 0.4628% and reduces the chance of being funded by the exchange by that margin. Informed by the result of our analysis, we recommend a state, provincial or zonal stock exchanges in place of ASeM to bring exchanges closer to SMEs.

    Keywords
    SMEs; Equity funding; Alternative Securities Market (ASeM); Regional Stock Exchange; Spatial Proximity; Logistic Regression Model.

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