This paper empirically tests the financial growth cycle model for small and medium-sized enterprises (SMEs), which postulates that as firms become larger, older, and more informationally transparent, their financing options become more attractive. We add to the literature by providing one of the first empirical tests of the model using a large, cross-sectional data set. Our results partially support the financial growth cycle model. Specifically, our results show larger firms, as measured by total number of employees, are more likely to use public equity funding or long-term debt as opposed to insider funding.

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When making decisions with multiple criteria, a decision maker often thinks in terms of an aspiration point or levels of achievement for the criteria. In multiple objective mathematical programming, solution methods based on aspiration points can generate nondominated solutions using a variety of scalarizing functions. These reference point solution methods commonly use a scalarizing function that reaches down from the ideal solution, in a direction specified by the aspiration point. Conversely, a similar scalarizing function can push out from the nadir point toward a specified aspiration point. In this paper we explore the structure of these two reference point approaches, examine the discrepancy between resulting solutions and consider the effect of problem framing on decision maker behaviour.