Local Economic Growth

 

Local Economic Growth


This programme investigates the key factors that hinder business growth and sustainability and is led by Professor Vania Sena and Professor Jerry Coakley.

Why is it so difficult for SMEs to get finance?



1

Bank credit and SME credit risk

Researchers: Dr Raffaella Calabrese and Professor Claudia Girardone

Small and medium sized enterprises (SMEs) and young firms tend to be rationed in their access to bank credit and to external finance because they have less informative financial accounts (informational opacity) and their credit histories are typically shorter.

Using detailed firm level data from Experian linked with demographic and local authority data this project will explore the creditworthiness of SMEs using probit models. The research will identify the SMEs and other local/regional features that are more likely to be associated with success in obtaining bank loans. The research will help inform local and regional policies in implementing new schemes or improving existing ones to enable SMEs to find the financial support they need to grow.

Exploring the Experian dataset at both national and county/region levels, our research using credit scoring models will identify the probability of SME credit default across the area. Since the widely used logistic regression model may underestimate the probability of default, we will apply the generalised extreme value regression model. The research project will identify new credit scoring models that would permit banks to compute more robust measures of SME default probability and will be used to educate SMEs to improve their chances of raising credit.

Browse the latest publications from our researchers

2

Equity financing and growth

Researcher: Professor Jerry Coakley

Established SMEs can grow by tapping the equity markets via an initial public offering (IPO). One of the puzzles in the IPO literature is that firms on average tend to underperform in financial and operational terms in the 3-5 year post-IPO period.

The objective of this project is to disaggregate post-IPO performance to establish the drivers of above and below median performance/growth at both the national and the South East England (to overcome IPO sample size issues) levels. Quantile regression methods will be employed with linked data sets including from Experian, SDC Thomson Financial, Datastream and local authority data. By looking at the entire distribution of the dependent variable, quantile regression can show the differences in the effects of the changes in the regressors on the regress and at different points.

Browse the latest publications from our researchers

Should we all have access to fast broadband?

3

Telecommunication networks

Researchers: Professor Vania Sena and Dr Juan Carlos de Arroyabe

Businesses need to have a well-functioning telecommunication network to thrive, not only for everyday operations but also for the efficient management of the supply chain and of a growing customer base. This is a particular issue for regions with large rural areas. Bottlenecks along these networks are a common experience with the result that firms have to bear the extra costs associated with these delays.

By combining different types of data which were previously unavailable, data on the telecommunication network in the Eastern region will be used to map the network and identify bottlenecks. Learning-based dynamic models of supply chains will be employed to quantify the impact of the different types of bottlenecks and network delays on the supply chain’s performance. This research project will map the bottlenecks and slower traffic regions along the telecommunication network in the East of England quantifying the costs associated for businesses in terms of management of the supply chain and ease of access to customers. The project will identify areas where additional investment is needed and suggest changes in business practices to reduce the bottleneck costs.

Browse the latest publications from our researchers

Why is farming so volatile?

4

Price volatility in the agricultural sector

Researcher Professor Neil Kellard

East Anglia has been one of the most economically successful farming areas in the EU in terms of output value and profitability. Food, drink and agriculture account for more than 1 in 8 jobs in Norfolk and Suffolk. Agricultural land is some of the highest quality in the country due to its flexibility, productivity and efficiency in response to inputs but farming income is vulnerable to the recent volatility in global agricultural prices.

Using a combination of global commodity (futures) data and local employment and income data this research project will investigate questions such as:

  • How much does such price volatility effect investment, employment and growth in agriculture?
  • How much of global movements in prices are passed through to local prices?
  • Are agricultural producers optimally using derivative markets and other risk sharing methods to manage external price risk?

A combination of datasets will be required to address the above areas: Experian, DataStream, IMF-International Financial Statistics, Labour Force Survey and county council data.

Browse the latest publications from our researchers

Have our high streets had their day?

5

Modelling the re-generation of the high street

Researchers: Professor Andrew Fearne and Dr Shaomin Wu

Shifting patterns of consumer behaviour and new retail business models have focused attention on the future of the high street. Pilot research that Kent Business School has conducted in the high streets of Haverhill (Suffolk) and Rochester (Kent) has highlighted the important role that occupancy and retail space utilisation has to play in re-defining what the high street has to offer and removing the barriers that exist to attracting significant numbers of people into what has historically been a hugely important community space.

Building on these pilot projects this research will use data provided by local councils on occupancy and the level of economic activity (business rates, employment, visitors and revenue) with Experian data to build a simulation model that will enable local authorities to conduct scenario analyses to inform their planning decisions and policies regarding commercial lettings and infrastructure development.

Browse the latest publications from our researchers

6

The impact of the voluntary sector on regional economic growth

Researchers: Professor Andrew Fearne and Dr Shaomin Wu

The potential role of the voluntary sector in sustainable economic development and growth is increasing as local government provision of public services is outsourced. Currently very little is known about the contribution that the voluntary sector makes.

This project will combine data provided by the Council for Voluntary Services (CVS) at Medway, relating to the strategic objectives of organisations tackling a range of social problems - public health, crime reduction, social isolation, youth employment - and data provided by Medway Council on the outcomes/impact associated with their activities, at micro (household/district) level. It will also explore the use of linked BT data.

This research will identify gaps in the strategic objectives and impact of the voluntary sector and opportunities for collaborative service delivery that will increase the impact of the voluntary sector on regional economic development and improve the prospects for a sector on which local government is likely to become more reliant for the delivery of public services in the future.

Browse the latest publications from our researchers

What is the effect of technology on company behaviour and profitability?



7

Broadband, Firm Productivity and Managerial Practices

Researchers: Professor Vania Sena and Dr Fola Malomo

The Centre is conducting a management survey to study management practices; profitability; and access to superfast internet among establishments within the County of Essex.

This work is guided by theories of management and production. Information from companies will be used with rigour and care to generate high-quality data. The study will be a contribution to the literature on the impact of information and communication technology on firm organisation; managerial autonomy; and profitability.

The output of this study will show the effect of acquiring superfast broadband on the profits of firms. This will be useful for companies and governments; especially those stakeholders that are interested in technology and infrastructure

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Browse the latest publications from our researchers


 

Local Economic Growth


This programme investigates the key factors that hinder business growth and sustainability and is led by Professor Vania Sena and Professor Jerry Coakley.

Why is it so difficult for SMEs to get finance?


1

Bank credit and SME credit risk

Researchers: Dr Raffaella Calabrese and Professor Claudia Girardone

Small and medium sized enterprises (SMEs) and young firms tend to be rationed in their access to bank credit and to external finance because they have less informative financial accounts (informational opacity) and their credit histories are typically shorter.

Using detailed firm level data from Experian linked with demographic and local authority data this project will explore the creditworthiness of SMEs using probit models. The research will identify the SMEs and other local/regional features that are more likely to be associated with success in obtaining bank loans. The research will help inform local and regional policies in implementing new schemes or improving existing ones to enable SMEs to find the financial support they need to grow.

Exploring the Experian dataset at both national and county/region levels, our research using credit scoring models will identify the probability of SME credit default across the area. Since the widely used logistic regression model may underestimate the probability of default, we will apply the generalised extreme value regression model. The research project will identify new credit scoring models that would permit banks to compute more robust measures of SME default probability and will be used to educate SMEs to improve their chances of raising credit.



2

Equity financing and growth

Researcher: Professor Jerry Coakley

Established SMEs can grow by tapping the equity markets via an initial public offering (IPO). One of the puzzles in the IPO literature is that firms on average tend to underperform in financial and operational terms in the 3-5 year post-IPO period.

The objective of this project is to disaggregate post-IPO performance to establish the drivers of above and below median performance/growth at both the national and the South East England (to overcome IPO sample size issues) levels. Quantile regression methods will be employed with linked data sets including from Experian, SDC Thomson Financial, Datastream and local authority data. By looking at the entire distribution of the dependent variable, quantile regression can show the differences in the effects of the changes in the regressors on the regress and at different points.



Should we all have access to fast broadband?

3

Telecommunication networks

Researchers: Professor Vania Sena, Dr Sunny Yang and Dr Juan Carlos de Arroyabe

Businesses need to have a well-functioning telecommunication network to thrive, not only for everyday operations but also for the efficient management of the supply chain and of a growing customer base. This is a particular issue for regions with large rural areas. Bottlenecks along these networks are a common experience with the result that firms have to bear the extra costs associated with these delays.

By combining different types of data which were previously unavailable, data on the telecommunication network in the Eastern region will be used to map the network and identify bottlenecks. Learning-based dynamic models of supply chains will be employed to quantify the impact of the different types of bottlenecks and network delays on the supply chain’s performance. This research project will map the bottlenecks and slower traffic regions along the telecommunication network in the East of England quantifying the costs associated for businesses in terms of management of the supply chain and ease of access to customers. The project will identify areas where additional investment is needed and suggest changes in business practices to reduce the bottleneck costs.



Why is farming so volatile?

4

Price volatility in the agricultural sector

Researcher Professor Neil Kellard

East Anglia has been one of the most economically successful farming areas in the EU in terms of output value and profitability. Food, drink and agriculture account for more than 1 in 8 jobs in Norfolk and Suffolk. Agricultural land is some of the highest quality in the country due to its flexibility, productivity and efficiency in response to inputs but farming income is vulnerable to the recent volatility in global agricultural prices.

Using a combination of global commodity (futures) data and local employment and income data this research project will investigate questions such as:

  • How much does such price volatility effect investment, employment and growth in agriculture?
  • How much of global movements in prices are passed through to local prices?
  • Are agricultural producers optimally using derivative markets and other risk sharing methods to manage external price risk?

A combination of datasets will be required to address the above areas: Experian, DataStream, IMF-International Financial Statistics, Labour Force Survey and county council data.



Have our high streets had their day?

5

Modelling the re-generation of the high street

Researchers: Professor Andrew Fearne and Dr Shaomin Wu

Shifting patterns of consumer behaviour and new retail business models have focused attention on the future of the high street. Pilot research that Kent Business School has conducted in the high streets of Haverhill (Suffolk) and Rochester (Kent) has highlighted the important role that occupancy and retail space utilisation has to play in re-defining what the high street has to offer and removing the barriers that exist to attracting significant numbers of people into what has historically been a hugely important community space.

Building on these pilot projects this research will use data provided by local councils on occupancy and the level of economic activity (business rates, employment, visitors and revenue) with Experian data to build a simulation model that will enable local authorities to conduct scenario analyses to inform their planning decisions and policies regarding commercial lettings and infrastructure development.



6

The impact of the voluntary sector on regional economic growth

Researchers: Professor Andrew Fearne and Dr Shaomin Wu

The potential role of the voluntary sector in sustainable economic development and growth is increasing as local government provision of public services is outsourced. Currently very little is known about the contribution that the voluntary sector makes.

This project will combine data provided by the Council for Voluntary Services (CVS) at Medway, relating to the strategic objectives of organisations tackling a range of social problems - public health, crime reduction, social isolation, youth employment - and data provided by Medway Council on the outcomes/impact associated with their activities, at micro (household/district) level. It will also explore the use of linked BT data.

This research will identify gaps in the strategic objectives and impact of the voluntary sector and opportunities for collaborative service delivery that will increase the impact of the voluntary sector on regional economic development and improve the prospects for a sector on which local government is likely to become more reliant for the delivery of public services in the future.