Eurostat's Access to Finance No. 2
Last year I posted on an effort at Eurostat to do a large-scale survey on Access to Finance. Since that time, more than a year has passed and it looks like Eurostat is much further down the line in developing this survey. I haven't been tied very closely to their efforts since then because over time what they are attempting to do and what we have done with the Kauffman Firm Survey (KFS) have diverged. I am actually really pleased that this has happened, in a way, because Eurostat made some very important decisions early on in conceptualizing their study that limited its ability to gather comparable data to the KFS and the new version of their survey seems much more realistic in the content it collects and likely to get comparable data across European countries.
The minutes from the most recent expert meeting on the survey and the draft survey instrument show a survey effort that has gelled on trying to determine how the relationship has changed between 2007 and 2010 between small firms and debt/equity markets. This survey is notable because it is one of the few which asks businesses about attempts to access equity markets (and debt), not just actual equity or debt received. Now, while this is a solid instrument and they face a lot of limits in the length of the survey, I would have concerns about the complexity of concepts used here with no definitions (like factoring) and the reliability of the data as a result. The saving grace may be that the survey skirts most respondent fears by not actually asking for specific dollars received or other sensitive topics, only overall use. The other downside is there is no way to gather data on the experience of the companies that didn't survive 2007 to 2010, an obviously tumultuous set of years where access to finance may have been a critical factor in their sustainability. Additionally, these national statistical offices, which already have a significant amount of rich microdata, are gathering data through this survey that is least helpful to them in matched microdata analysis. While they get a lot of directional feedback from businesses, they don't get specifics - like amounts - which for research purposes would have been so much more valuable when matched with other business data already on record. But I have to keep reminding myself that the national statistical offices are not actually charged with performing the research which could really inform policy in this area; they need to be good stewards of the data and try to achieve high response rates so that tabular information can be published and sent to Eurostat.
Eurostat has a tough task in organizing a survey like this since they never actually have the microdata and don't carry out the country-level collections. I admire them for taking on this important and tough subject but do so wish that the European regulations were different and that this enormous effort could be used to create a rich research data set which would go so much further in advancing research and understanding in this area than the aggregate tables and limited reports which this effort will produce. Don't even get me started on the fact that no non-European countries will be fielding replications of this effort (to my knowledge) when it happens even though this has been in the planning stages for more than three years.
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