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The impact of firm and industry characteristics on small firms' capital structure

Small business economics, 2012-05, Vol.38 (4), p.431-447 [Peer Reviewed Journal]

2012 Springer ;The Author(s) 2010 ;Springer Science+Business Media, LLC. 2012 ;ISSN: 0921-898X ;EISSN: 1573-0913 ;DOI: 10.1007/s11187-010-9281-8

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Title:
The impact of firm and industry characteristics on small firms' capital structure
Author: Degryse, Hans ; de Goeij, Peter ; Kappert, Peter
Subjects: Business and Management ; Business structures ; Capital structure ; Collateral ; Corporate debt ; Datasets ; Debtors ; Depreciation ; Economic growth ; Economic models ; Economic theory ; Entrepreneurship ; Equity ; Financial leverage ; Financial management ; Financing methods ; Food industries ; Industrial Organization ; Industrial sector ; Intangible assets ; Long term debt ; Management ; Microeconomics ; Netherlands ; Panel data ; Proprietary ; Securities markets ; Short term debt ; Size of enterprise ; Small & medium sized enterprises-SME ; Small and medium sized enterprises ; Small business ; Studies
Is Part Of: Small business economics, 2012-05, Vol.38 (4), p.431-447
Description: We study the impact of firm and industry characteristics on small firms' capital structure, employing a proprietary database containing financial statements of Dutch small and medium-sized enterprises (SMEs) from 2003 to 2005. The firm characteristics suggest that the capital structure decision is consistent with the pecking-order theory: Dutch SMEs use profits to reduce their debt level, and growing firms increase their debt position since they need more funds. We further document that profits reduce in particular short-term debt, whereas growth increases long-term debt. We also find that inter-and intraindustry effects are important in explaining small firms' capital structure. Industries exhibit different average debt levels, which is in line with the trade-off theory. Furthermore, there is substantial intra-industry heterogeneity, showing that the degree of industry competition, the degree of agency conflicts, and the heterogeneity in employed technology are also important drivers of capital structure.
Publisher: Boston: Springer
Language: English
Identifier: ISSN: 0921-898X
EISSN: 1573-0913
DOI: 10.1007/s11187-010-9281-8
Source: Alma/SFX Local Collection
Springer Nature OA/Free Journals
ProQuest Central

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The impact of firm and industry characteristics on small firms' capital structure

2012 Springer ;The Author(s) 2010 ;Springer Science+Business Media, LLC. 2012 ;ISSN: 0921-898X ;EISSN: 1573-0913 ;DOI: 10.1007/s11187-010-9281-8

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