New Financing Instruments to Bridge the Funding Gap: The Lesson from Italy

The funding gap occurs when deserving companies do not get the amount of loans that they would get in an efficient market, making obstacles to the birth and growth of companies. This research analyzes the ability of two funding instruments that have been identified as alternatives to bank debt, to bridge the funding gap that followed the sovereign debt crisis in Italy: mini-bonds and companies’ networks. Studying a sample of 216 companies funded in 2013–14, the analysis is carried out by a Student’s T test and a regression model. The results suggest that mini-bond’s issuers present a better financial structure when compared to networked companies, despite the extra cost of financing on companies’ revenues.