Can securitizing public procurement contracts help small and medium-sized enterprises access capital and contribute to economic growth?
| Autor: | SOUISSA, Yousra, AZMOUR, Mohamed, CHAREF, Fatima |
|---|---|
| Rok vydání: | 2023 |
| Předmět: | |
| Zdroj: | International Journal of Accounting, Finance, Auditing, Management and Economics; Vol. 4 No. 3-1 (2023): Theoretical Reserach; 563-577 International Journal of Accounting, Finance, Auditing, Management and Economics; Vol. 4 No. 3-1 (2023): Recherches Théoriques; 563-577 |
| ISSN: | 2658-8455 |
| DOI: | 10.5281/zenodo.8075740 |
| Popis: | Public procurement contracts are agreements issued by government entities to acquire goods, or services, from external suppliers. These contracts typically require a significant financial investment to handle upfront costs, mobilize resources, and sustain operations throughout the contract duration. Consequently, they are often awarded to large, established firms. As a result, this creates challenges for smaller companies, as they face difficulties in competing against these larger firms. Smaller companies often have limited access to capital markets and may lack financial stability. These resource limitations place them at a disadvantage, making it challenging to compete on an equal footing with larger, more resourceful firms in the procurement arena. However, the role of small and medium-sized enterprises (SMEs) is crucial in driving economic growth and development. Recognizing the criticality of small and medium-sized companies, it is essential to cultivate an enabling environment that supports their growthand facilitates access to resources and markets. The objective of this research paper is to shed light on the feasibility of using securitization as a financing mechanism to enhance the capital accessibility of SMEs in the context of public procurement contracts. Based on a thorough review of the available literature, to date, there is a dearth of literature specifically addressing the securitization of public procurement contracts. This research paper, therefore, serves as a pioneering contribution to the field, introducing and proposing a conceptual model for the utilization of securitization as a potential financing mechanism in the context of public procurement. Drawing upon existing literature on securitization and public procurement, a theoretical conceptual model is presented, outlining the key components and potential mechanisms involved in securitizing these contracts. By venturing into unexplored territory, the paper aims to shed light on the feasibility, advantages, and challenges associated with this novel financing approach. Our analysis reveals a robust positive correlation between the securitization of public procurement contracts and the enhancement of access to capital for small and medium-sized enterprises (SMEs). Through the securitization process, SMEs can convert their expected future cash flows from public procurement contracts into tradable securities. This transformation enables SMEs to tap into the capital markets and attract a diverse range of investors interested in these securitized instruments. Consequently, we conclude that securitization of public procurement contracts emerges as a promising mechanism to empower SMEs and address their persistent challenge of limited access to capital, ultimately contributing to their overall success, competitiveness, and hence economic growth. Key Words: Securitization, Public procurement contracts, Small and medium-sized enterprises, Financing mechanism, Capital accessibility, Economic growth, risks and challenges. JEL Classification: G32, H75 Paper type: Theoretical Research |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|