The Determinants of Financial Structure: New Insights from Business Start-Ups

Gucht, Linda M. Van De; Huyghebaert, Nancy

doi:10.2139/ssrn.296841

Cited by 33 publications

(45 citation statements)

References 73 publications

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“…Also, information asymmetries and problems of adverse selection and moral hazard are less severe for trade credit applications than for bank loan applications (García-Teruel and Martínez-Solano 2010). Trade credit suppliers have been found to be less rigid in their liquidation policies than banks (Huyghebaert and Van de Gucht 2007).…”

Section: Trade Credit Versus Bank Financingmentioning

confidence: 99%

Bank debt and trade credit for SMEs in Europe: firm-, industry-, and country-level determinants

2017

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Section: Trade Credit Versus Bank Financingmentioning

confidence: 99%

Bank debt and trade credit for SMEs in Europe: firm-, industry-, and country-level determinants

2017

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“…shareholder with a stake of 50% or more, while the percentage decreases to 30% for the listed sample. When the firm is not listed, the financing choice will be made between two main options, debt and internal funds, with debt implying a greater loss of control (Huyghebaert and Van de Gucht, 2007). However, when the firm is listed, financing with internal funds may not be enough, and the main question is whether to finance chiefly with debt or equity.…”

Section: Multivariate Analysis [Insertmentioning

confidence: 99%

Young family firms: Financing decisions and the willingness to dilute control

Keasey

Martínez

Pindado

2015

Journal of Corporate Finance

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We study the relationship between leverage and the willingness of listed family firms to dilute control, proxied by the ownership of the main shareholder. We find that the main owner's stake positively impacts on leverage and that this impact is stronger when the business is a young family firm. Furthermore, the life cycle matters when analyzing this relationship. These results allow us to argue that owners with a greater stake prefer to raise finance via debt rather than dilute their position via equity, and that family firms face a trade-off between their control risk aversion and the need for external financing.

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“…As such, it will be necessary to find external sources of financing (Tahvanainen, 2004). Private banks are afraid to invest in TBCs (Huyghebaert & Van de Gucht, 2007). Thus, typical alternatives include public banks or business partners who can make loans or co-investments, especially partners related to a TBC value chain (Jones & Jayawarna, 2010).…”

Section: Hypothesesmentioning

confidence: 99%

The role of networks in technological capability: a technology-based companies perspective

et al. 2018

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This study examined the influence of networks on the development of technological capabilities of 90 technology-based companies (TBCs) graduated by Brazilian incubators. The relational-based view theoretically supported the study. The data were processed via Structural Equation Modeling (SEM). A model with three hypotheses was tested. Two hypotheses were validated, proving that technological and financial networks built by those firms with external agents explained 70.6% of their capacity to innovate. The insertion into technology networks of licensing, universities, suppliers, and consulting shows that the TBCs are making use of relationships of high technical content, which is expected according to previous literature. As for the financial networks, it was observed that the insertion into networks of venture capital and economic subvention demonstrates that the innovation ecosystem presents advancements in the well-known challenge of financial support for technology-based startups. A third hypothesis was not validated, which provides another important finding: the planning effort presented a negative relationship on the technological capability, but a positive relationship on the insertion into relationship networks. This means that only direct planning is not able to support technological capabilities. In other words, planning is more effective when indirectly applied to relational resources of technical and financial networks, rather than when directly applied to technological capabilities. The insertion into technical and financial networks, in turn, positively affects the TBC's innovation capability. Results demonstrate that this change in planning focus, from inside to outside of the company, could improve technological capabilities in R&D, patent, people, and products. Future studies could investigate the entrepreneur's competencies in managing networks and further understanding of how networks could be constructed through formal and informal cooperation.

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The Determinants of Financial Structure: New Insights from Business Start-Ups

Cited by 33 publications

References 73 publications

Bank debt and trade credit for SMEs in Europe: firm-, industry-, and country-level determinants

Bank debt and trade credit for SMEs in Europe: firm-, industry-, and country-level determinants

Young family firms: Financing decisions and the willingness to dilute control

The role of networks in technological capability: a technology-based companies perspective

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