Identifying minibonds issued level's determinants to empower companies' funding managerial strategies

Purpose– This paper aims to explore the determinants of the level of minibonds issued by companies. In doing so, it discusses the importance of minibonds in providing a market-based funding source. In the empirical analysis, special attention is paid to the study of the recovery from the COVID-19 crisis. Design/methodology/approach– The analysis is carried out through an econometric approach, based on a high-quality empirical dataset related to Italian small- and medium-sized enterprises (SMEs). The reference period covers the recent pandemic. From a theoretical point of view, a regression model is implemented, including multicollinearity analysis and an outlier detection procedure. Findings– The results of the study indicate that factors such as leverage, cash flow, firm collateral, and seniority can explain the amount of minibonds issued. These findings provide valuable insights into the drivers of minibond issuance and highlight the potential benefits of minibonds as a financing option for Italian SMEs. Practical implications– Importantly, the results highlight relevant managerial implications at two levels. On the one hand, a managerial discussion is developed on the worthiness of accessing the minibond market; on the other hand, insights are provided regarding the managerial implications related to the characteristics of companies issuing minibonds. Originality/value– The paper investigates an innovative financial instrument that has been introduced recently and has not yet been studied in depth. To the best of our knowledge, this is the first contribution assessing the main drivers of minibond issuance levels, a timely and relevant topic in managerial research. In addition, this study also considers the impact of the COVID-19 pandemic on minibond issuance, making the analysis suitable for explaining the current economic context.