Firm-Level Determinants of the Financing Decisions of Small and Medium Enterprises: Evidence from Argentina

Briozzo, Anahí Eugenia; Vigier, Hernán Pedro; Martínez, Lisana B.

doi:10.1080/10978526.2016.1209081

Cited by 19 publications

(17 citation statements)

References 40 publications

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“…Empirically, the influence of access to bank loan at creation on start-up survival is not a subject of consensus. In empirical studies, the effect is sometimes positive, sometimes negative, and sometimes inexistent (Briozzo, Vigier, and Martinez 2016). The results of Cooper and Gimeno-Gascon (1992), and Cooper, Gimeno-Gascon, and Woo (1994) highlight a positive impact of the access to bank loans at creation on company survival.…”

Section: Access To Bank Loans During Company Creation and Company Surmentioning

confidence: 99%

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Indebtedness for young companies: effects on survival

Wamba

Hikkerova

Sahut

et al. 2016

Entrepreneurship & Regional Development

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Based on data from 7,350 Cameroonian companies created between 1990 and 2008, we study the link between the characteristics of indebtedness for young companies during their creation and survival period of up to three years, from three to five years, and beyond five years. We complement our quantitative analysis with semi-directive interviews of Cameroonian entrepreneurs to deepen our study. Our results are manifold. We show that access to bank loans during the creation phase, as well as the volume of loans or, to some extent, the debt ratio improve the probability of survival during the early years, but this effect fades away rapidly. The interviews shed light on the motivations of entrepreneurs, particularly of those with very small businesses. Finally, our work reveals the antecedent role of their social capital that facilitates their access to bank loans, and, therefore, the probability of company survival.

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Section: Access To Bank Loans During Company Creation and Company Surmentioning

confidence: 99%

“…moral hazard exists). The capacity of a young entrepreneur is unknown prior to the receipt of a loan, which leads to a risk of adverse selection (Briozzo, Vigier, and Martinez 2016). Furthermore, an entrepreneur could pursue specific objectives that conflict with those of its funders.…”

Section: Financial Structure Of a Young Company And Its Survivalmentioning

confidence: 99%

Indebtedness for young companies: effects on survival

Wamba

Hikkerova

Sahut

et al. 2016

Entrepreneurship & Regional Development

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“…The proponents of the Pecking Order Hypothesis explain that this hierarchical order is the result of greater flexibility and lower transaction costs of internal versus external resources. In this stream, the leverage is considered to be disadvantageous compared to the use of internal sources (Briozzo et al 2016;Martinez et al 2017).…”

Section: Smes Financial Structurementioning

confidence: 99%

“…In this sense, SMEs financial structure and its determinant is a wide subject of study that has changed over time and according to the set of SMEs analyzed, many factors affect their financial decisions. As it is commonly known, SMEs financial access is restricted due to large information asymmetries, agency risk, scarce physical collaterals, and specific activities and firm's characteristics (Berger and Udell 1998;Briozzo et al 2016). In light of the 2008 financial crisis, many European markets suffered credit constrained problems.…”

Section: Introductionmentioning

confidence: 99%

SME Steeplechase: When Obtaining Money Is Harder Than Innovating

Guercio

Martínez

Bariviera

2019

IJFS

Self Cite

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In this paper, we analyze the main characteristics of European Small and Medium Enterprises (SMEs), related to the demand for and access to external financial resources. We use microdata from an extensive database, elaborated by the European Central Bank and the European Commission: the Survey on the Access to Finance of Enterprises. Firstly, we consider a set of variables as determinants to the decision to apply for different financial instruments. Secondly, we use the same set of variables to analyze the actual access to these instruments. For each regression, several SMEs profiles were created, in order to detect SMEs archetypes according to their decisions. The results are thought-provoking, and highlight that differences in firms characteristics (size, innovative activities, etc.), influence not only the access to, but also the demand for external finance.

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“…Where funds are inadequate, debt is preferred because it is relatively a cheaper source of finance. Equity is issued as a last resort (Myers, 2001;Briozzo, Vigier, & Martinez, 2016). Frequently, firms are in either of two situations, fund deficiency or availability of surpluses.…”

Section: Introductionmentioning

confidence: 99%

Adherence to the Pecking Order in Deficit and Surplus Conditions: A Comparative Study of Firms in India and China

Bhama

Jain²,

Yadav

2018

AJBA

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Manuscript type: Research paper Research aims: This study examines firms' adherence to the pecking order in deficit and surplus situations by comparing firms in India and China. It also examines the extent of debt issues and redemption when the deficits and surpluses are relatively large in amount. Design/Methodology/Approach: This study analyses the data of the Bombay Stock Exchange (BSE) 500 index and the Shanghai Stock Exchange (SSE) 380 index firms. It uses Ordinary Least Square (OLS) regression to examine the effect of deficit and surplus on debt issuance and redemption. Research findings: The findings indicate that deficit firms in India as well as China adhere to the pecking order by issuing large amounts of debt. The debt issues (short-term debt) are exceptionally higher among Chinese firms whereas Indian firms issue more longterm debts. In addition, Chinese firms prefer to utilise new funds to redeem the existing debts because most of their debts are short term whereas Indian firms use a major chunk of their proceeds to finance deficits. Chinese surplus firms do not retain sizeable funds, an overwhelming proportion of these funds is used to redeem their existing short-term debts. In contrast, Indian surplus firms are

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Firm-Level Determinants of the Financing Decisions of Small and Medium Enterprises: Evidence from Argentina

Cited by 19 publications

References 40 publications

Indebtedness for young companies: effects on survival

Indebtedness for young companies: effects on survival

SME Steeplechase: When Obtaining Money Is Harder Than Innovating

Adherence to the Pecking Order in Deficit and Surplus Conditions: A Comparative Study of Firms in India and China

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