This article investigates the capital structure dynamics of European SMEs by assessing the impact of firm-specific, institutional, and macroeconomic factors over the period 2005–2015, including the European Sovereign Debt Crisis (ESDC). In this setup, we perform a dynamic panel data analysis, along with several model specifications and robustness tests on listed SMEs of EU-28, dividing them into firm categories (micro, small, and medium) and country groups (core, periphery, high technology, and new EU member countries). We find that the effect of capital structure determinants do not differ significantly across size and country groups. The results suggest that profitability, asset structure, and size have been the driving forces of listed SME’s leverage, regardless of the size of the companies and the country group. At a macroeconomic and institutional level, taxation is the most significant variable for all the subgroups. Finally, the ESDC seems to increase the leverage of the listed SMEs in the periphery and the new member states countries, leaving the core countries practically unaffected. Cet article examine la dynamique de la structure de capital des PME européennes en évaluant l’impact des facteurs propres aux entreprises, institutionnels et macroéconomiques, pendant la période 2005–2015, y compris celle de la crise de la dette souveraine européenne. Dans cette configuration, nous procédons à une analyse de données de panel, ainsi qu’à des tests de spécification et de robustesse de plusieurs modèles sur des PME cotées dans les 28 pays de l’UE, en les divisant par catégories d’entreprises (micro, petites et moyennes) et par groupes de pays (centraux, périphériques, à la pointe de la technologie, et nouveaux États membres de l’UE). Nos résultats révèlent que les effets des déterminants de la structure de capital ne diffèrent pas de manière significative d’un type d’entreprise ou d’un groupe de pays à l’autre. Ils suggèrent également que la rentabilité, la structure des actifs et la taille sont les forces motrices de l’influence des PME cotées, indépendamment de la taille des entreprises et du groupe de pays. Aux plans macroéconomique et institutionnel, la fiscalité est la variable la plus significative pour tous les sous-groupes. Enfin, la crise de la dette souveraine européenne semble accroître l’influence des PME cotées dans les pays périphériques et les nouveaux États membres, laissant les pays centraux pratiquement non-affectés.

This study investigates the impact of COVID-19 on the non-performing loans (NPLs) in Europe, distinguishing by European subregion, country-level prosperity, NPL type, and NPL economic sector. We utilized panel data analysis covering the period 2015Q1–2021Q4 while controlling for macro, bank-specific, and regulatory indicators. We derived that the COVID-19 deaths and the strictness of lockdown measures positively affected the NPLs, while the economic support policies exerted a negative effect. Profitable, capitalized banks fared better. The strictness of lockdown measures hindered the ability of SMEs to repay their loans, increasing their NPLs. Sectors involving physical work-related activities also experienced an increase in their NPLs. We also deduced that bank securitization and national culture significantly contributed to NPL reduction.

This paper employs econometric techniques in order to examine the role of political risk on the capital structure decisions of European listed SMEs, during a period which fully captures the Euro zone debt crisis and aspects of political risk due to the recession and its over-indebtedness. We find that political risk decreases significantly SMEs leverage via different and significant transmission channels. Very small (micro) enterprises are decreasing more significantly their leverage at times of political risk. The strength of the creditor’s rights acts as a proxy for the possible effects of the political risk. Political risk combined with corruption has a positive effect on firm leverage.