Capital structure dynamics among SMEs: Swedish empirical evidence

Yazdanfar, Darush

doi:10.1108/jrf-04-2015-0040

Cited by 17 publications

(25 citation statements)

References 55 publications

(60 reference statements)

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“…According to pecking order theory, the older the firm, the longer it has had to accumulate retained profits and the greater its ability to eschew debt financing (Mac an Lucey, 2010, 2014;Myers, 1984). Moreover, it is suggested that younger firms tend to use proportionally more STD than do older ones (Sánchez Martin Ugedo, 2005, 2012;Yazdanfar and Öhman, 2016) and that younger firms tend to have less LTD than do older ones (Serrasqueiro and Nunes, 2012;Yazdanfar and Öhman, 2016). Accordingly, young SMEs seem to be more dependent on STD, whereas old SMEs seem to be more able to access LTD.…”

Section: The Independent Variables and Hypothesesmentioning

confidence: 99%

“…It is also suggested that STD and LTD in some cases can be substitutes for each other (Petersen and Rajan, 1997). In a recent study, Yazdanfar and Öhman (2016) investigated the existence of dynamic capital structure in Swedish SMEs across their life-cycle stages. Their findings suggest that the STD level is relatively high in early life-cycle stages, decreasing later on, while the LTD level is low in all life-cycle stages investigated, although increasing slightly as firms age.…”

Section: Introductionmentioning

confidence: 99%

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Short- and long-term debt determinants in Swedish SMEs

Yazdanfar

2017

RAF

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Purpose This paper aims to empirically investigate the capital structure determinants of small and medium-sized enterprises (SMEs) with a particular focus on short- and long-term debt. Design/methodology/approach Several methods were used to analyse a sample of 15,897 Swedish SMEs for which complete financial information was available for a four-year period following the 2008 financial crisis, i.e. the 2009-2012 period. Findings The results indicate that eight explanatory variables – i.e. size, age, growth, profitability, liquidity, asset tangibility, non-debt tax shields and industry affiliation – are associated to various extents with SME debt policy. Research limitations/implications The current study is limited to examining a sample of Swedish SMEs in five industry sectors covering the 2009-2012 period. Further research could examine the generalizability of the present results by considering other countries, industry sectors and periods. Practical implications As debt policy influences firm performance, value and survival, SME owners and managers, regulators and financial institutions may benefit from studies considering a relatively large number of capital structure determinants, several of which are linked to short- and long-term debt in various ways. Originality/value This study is one of the few to examine the determinants of short- and long-term debt in SMEs, which play a fundamental role in the economy, using a large-scale cross-sectional database covering a period following the 2008 financial crisis.

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Section: The Independent Variables and Hypothesesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Short- and long-term debt determinants in Swedish SMEs

Yazdanfar

2017

RAF

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“…When focussing on the difference between short-and long-term loans, this research shows different patterns, depending on the age of the company. Newer MSEs Financing needs of microenterprises have shorter-term borrowing ratios and borrow more than more established MSEs (Yazdanfar and Öhman, 2016).…”

Section: Financing In the Ongoing Business Stagementioning

confidence: 99%

Financing needs of micro-enterprises along their evolution

Prijadi¹,

Wulandari²,

Desiana³

et al. 2020

IJOES

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Purpose The purpose of this paper aims to investigate micro enterprises financing in Indonesia and examines how this financing differs, depending on the enterprise’s development stage. This research also identifies some structural problems related to micro-financing and provides workable solutions. Design/methodology/approach This research uses the entrepreneurial network model of Schutjens and Stam (2003) to examine how Indonesian micro and small enterprises (MSEs) evolve even before they become regular small businesses. Content analysis is used on 10 micro-enterprises from Jakarta, the capital city of Indonesia and its surroundings. Financing issues at each stage of enterprise development are identified and deeply examined. Findings This research not only confirms the significant financing problems micro-enterprises face but also clarifies that these problems are unique to each stage of the MSEs’ development. One insight is that most micro-enterprises do not use funding from formal institutions. That is, business owners rely more on funding from non-formal institutions. This is because these enterprises’ managers generally cannot prepare loans application and/or they are lack of knowledge/training on financing matters. They hesitate to borrow from formal financial institutions, as the rates are high but the processing time is longer than those of the loan sharks. Originality/value This research contributes to the field of entrepreneurial finance by identifying the structural problems inherent in micro-finance and providing workable solutions for overcoming these problems.

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“…According to the pecking order theory, a firm's characteristics, are linked to its capital structure [Myers 1984]. Firms may choose external capital sources if they believe that the total cost of accessing it is lower than that of internal sources or if they have no other alternatives [Öhman, Yazdanfar 2016]. The pecking order explains the negative relationship between capital structure and profitability, and why the most profitable firms generally borrow less or more.…”

Section: Capital Structure Theory and Evidencementioning

confidence: 99%

SMEs capital structure determinants: empirical evidence from Kazakhstan

Kokeyeva

2019

Financial Sciences

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The purpose of this paper is to study the standard firm-factor determinants on capital structure of small and medium-sized enterprises (SMEs). To this end, we analyzed small and medium sized firms in Kazakhstan, where all sectors were considered. We use panel data methods to investigate the determinants of capital structure for non-financial SMEs in Kazakhstan. This study examines the impact of key determinants such as asset tangibility, size, growth, profitability and tax rate of SMEs. The trade-off theory and the pecking order theory of capital structure guided this study. The results suggest that despite some differences in the influence of factors on the capital structure, most of the determinants presented by the theory of finance appear indeed to be relevant for the Kazakhstan small and medium business sector.

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Capital structure dynamics among SMEs: Swedish empirical evidence

Cited by 17 publications

References 55 publications

Short- and long-term debt determinants in Swedish SMEs

Short- and long-term debt determinants in Swedish SMEs

Financing needs of micro-enterprises along their evolution

SMEs capital structure determinants: empirical evidence from Kazakhstan

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