Asset-Based Financing and the Determinants of Capital Structure in the Small Firm

Constand, Richard L.; Osteryoung, Jerome S.; Nast, Donald A.

doi:10.1007/978-94-011-3462-0_3

Cited by 22 publications

(23 citation statements)

References 23 publications

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“…In addition, we find that profitability has a greater impact on long-term debt (β=-0.16798) than on short-term debt (β=-0.14221), suggesting that as internal funds become available, long-term debt will be the first type of leverage to be replaced. A negative relationship between profitability and leverage is also reported by various studies (Constand et al, 1991;Chittenden et al, 1996;Michaelas et al, 1999;Sogorb-Mira, 2005;Serrasqueiro et al, 2011;Degryse et al, 2012).…”

Section: Determinants Of Debt and Discussion Of The Resultsmentioning

confidence: 73%

“…TOT forecasts a negative relationship between non-debt tax shields and debt. Constand et al (1991) and Degryse et al (2012) do not identify a significant effect of nondebt tax shields on debt ratio. However, Jordan, Lowe and Taylor (1998) and Michaelas et al (1999) conclude that non-debt tax shields have a negative effect on total debt.…”

Section: Non-debt Tax Shieldsmentioning

confidence: 96%

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Determinants of capital structure: New evidence from Portuguese small firms

Serrasqueiro¹,

Matias²,

Salsa³

2016

DAMeJ

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This paper studies the determinants of capital structure of 2,329 Portuguese small firms, decomposing total liabilities in long and short-term debt. The results of 2007-2011 panel data suggest that information asymmetry and agency problems seem to be important for small firms in accessing long-term debt. Greater size and a higher level of collateral are quite important in accessing long-term debt. Liquidity is positively associated with long-term debt, although it is negatively related to short-term debt. Higher profitability is related to lower levels of debt. When internal finance is insufficient, these firms seem to be strongly dependent on short-term debt, due to the difficulties in accessing long-term. The main conclusion of the current study is that the predicitons of POT and TOT are followed by small firms in their capital structure, which is in accordance with the results of previous studies focusing on SMEs.Keywords: capital structure; panel data models; small firms. ResumoNeste trabalho, analisamos os determinantes do endividamento das pequenas empresas portuguesas, utilizando os modelos de dados em painel e decompondo a dívida em médio/longo prazo e curto prazo. Os resultados obtidos sugerem que a informação assimétrica e os problemas de agência influenciam o acesso à dívida de longo prazo por parte destas empresas, assim como a dimensão e o nível de colateral. A liquidez está positivamente associada com a dívida de longo prazo e negativamente com a de curto prazo. Maior rendibilidade está relacionada com menor endividamento. Quando os fundos internos são insuficientes, as empresas parecem estar fortemente dependentes da dívida de curto prazo, dadas as dificuldades no acesso à de longo prazo. A principal conclusão deste trabalho é a de que os pressupostos da pecking-order theory e da trade-off theory se aplicam à estrutura de capital das pequenas portuguesas, o que está de acordo com os resultados obtidos em estudos anteriores sobre PME.Palavras-chave: estrutura de capital; dados em painel; pequenas empresas.

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Section: Determinants Of Debt and Discussion Of The Resultsmentioning

confidence: 73%

Section: Non-debt Tax Shieldsmentioning

confidence: 96%

Determinants of capital structure: New evidence from Portuguese small firms

Serrasqueiro¹,

Matias²,

Salsa³

2016

DAMeJ

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“…There are also many empirical studies on the financing decisions of large and listed companies (Bradley et al 1984;Auberbach 1985;Friend and Hasbrouck 1988;Titman and Wessels 1988;Barclay et al 1995;Rajan and Zingales 1995;Graham 1996;Chen et al 1998;Wald 1999;Rossi et al 2012;Rossi 2014), but the scientific community has only recently started to study the financial structures of the small companies. In spite of this, there are a considerable number of relevant empirical works worldwide such as Constand et al (1989), van der Wijst (1989), Walker (1989a, b), Holmes and Kent (1991), Chittenden et al (1996), Calcagnini and Iacobucci (1997), Hamilton and Fox (1998), Jordan et al (1998), Michaelas et al (1999) and López and Aybar (2000).…”

mentioning

confidence: 99%

The impact of corporate characteristics on the financial decisions of companies: evidence on funding decisions by Italian SMEs

et al. 2015

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Small and medium enterprises (SMEs) represent a large percentage of the corporate tissue of developed countries, but they do not have adequate attention. In fact, various researchers have focused their studies on larger and well-known companies. This paper aims to investigate the impact of corporate characteristic on the financial choices of SMEs, with a specific focus on agro-food micro companies. Access to finance is vital in business start-up, development and growth for SMEs, all with very different needs and facing different challenges in terms of finance compared to large companies. The lack of equity invested in small enterprises makes them more dependent on other external sources (e.g. bank loans, overdraft, factoring and leasing). The limitations of the paper are the result of its very nature: it is a largely conceptual paper. Empirical research is therefore needed to test and validate the essentially preliminary framework.

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“…Les premières études empiriques ont porté sur les décisions de financement des entreprises cotées (Bradlay, Jarrell et Kim, 1984 ;Auberbach, 1985). Plusieurs chercheurs se sont intéressés aux petites et moyennes entreprises (Constand, Osteryoung et Nast, 1991 ;Van der Wijst, 1989 ;Walker, 1989 ;Holmes et Kent, 1991 ;Van der Wijst et Thurik, 1993 ;Chittenden, Hall et Hutchinson, 1996 ;Jordan, Lowe et Taylor, 1998 ;Michaela, Chittenden et Poutziouris, 1999). Dans la lignée de ces travaux, notre étude vise à soumettre une réflexion sur la décision de la PMI en matière de financement.…”

Section: Introductionunclassified

La structure du capital des petites et moyennes entreprises industrielles tunisiennes

Omri¹,

Akremi²,

Bellouma

2012

ipme

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Résumé de l'article L'objectif de cet article est d'étudier la pertinence des différentes théories de financement dans l'explication du choix de la structure du capital au sein des petites et moyennes entreprises industrielles tunisiennes (PMI). Nous avons effectué une analyse empirique sur 300 PMI tunisiennes durant la période allant de 1997 à 2003. Nos résultats montrent que la décision de financement dans ces entreprises pourrait être expliquée par les principales théories de structure du capital (théorie fiscale, théorie de l'endettement optimal et théorie du financement hiérarchique). La théorie du financement hiérarchique semble le mieux convenir pour expliquer la politique de financement des PMI.

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Asset-Based Financing and the Determinants of Capital Structure in the Small Firm

Cited by 22 publications

References 23 publications

Determinants of capital structure: New evidence from Portuguese small firms

Determinants of capital structure: New evidence from Portuguese small firms

The impact of corporate characteristics on the financial decisions of companies: evidence on funding decisions by Italian SMEs

La structure du capital des petites et moyennes entreprises industrielles tunisiennes

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