On the other end, Huyghebaert (2008) have studied the facet of the result of financing control on SMEs conduct , and based on the findings of their study they contend that high control forms spurs for SMEs to take full advantage of immediate income for reducing the risk of unhelpful financing decisions by financing organizations and a likely resultant liquidation of the SMEs, seeing as their survival and growth is a decisive for those usually holding a mainly investment portfolio in undiversified form and benefit from large private benefits from control.
In his study of financing in SMEs in developing or emerging countries, Volz (2008) finds that best possible growth environment for SMEs are for the most part imperative in developing countries. However, he draws our attention towards the fact that SMEs in developing countries keep on to be gravely financially controlled, where a big number of firms in SMEs sector yet have no bank financing , and further they carry on to have tribulations of access to financing. On the other hand, the strained well-built supremacy of in-house financing for SMEs obstructs survival and growth. Astonishingly as he finds, existing banking or financial system reform could even have worsened access to finance for SME and notably out of country banks or financial institutions entry and running in the country tend to carry a remove of know-how and augment the competence of a changeover financial sector. Nevertheless, truly the movements of such out of country banks appears to profit principally large size firms, with SMES being more or less left out. In addition, elevated focus on the banking sector is unquestionably tend to perk up financing accessibility for SMEs in developing countries that require urgent policy issue.
Lehner and Schnitzer (2008) draw our attention towards the effect of foreign banks’ operation in the host country banking sector, and based on their findings they conclude that the domestic banks get the opportunity to be trained to run more proficiently together with foreign banks. In this framework, Dell’Ariccia and Marquez (2004) have extended a model which establishes that financing is more reachable to firms with convincing qualitative information in the case of more and more concentration of foreign banks. This model further establishes that foreign banks’ operation in a country leads to increased sum of financing offered or made accessible to SMEs in comparison to domestic banks.