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Capital structure dynamics among SMEs: Swedish empirical evidence
Mid Sweden University, Faculty of Human Sciences, Department of Business, Economics and Law.
Mid Sweden University, Faculty of Human Sciences, Department of Business, Economics and Law.
2016 (English)In: The Journal of Risk Finance, ISSN 1526-5943, Vol. 17, no 2, 245-260 p.Article in journal (Refereed) Published
Abstract [en]

Purpose

This paper aims to empirically investigate the existence of dynamic capital structure among small and medium-sized enterprises (SMEs) across their life cycle stages.

Design/methodology/approach

The analysis examined a sample of 15,952 SMEs across five industry sectors for the 2009-2012 period. Several techniques, including ANOVA and multivariate regressions, were used to analyse firm-level data.

Findings

The findings suggest that start-up SMEs, on average, rely on equity capital, and that the level of equity capital increases as firms age. The short-term debt level is particularly high in early life cycle stages, decreasing later on. The long-term debt ratio is positively related to firm age, although it is low in all life cycle stages investigated.

Practical implications

The findings may help several parties, including firm owners, to better understand how capital structure can be related to various life cycle stages. Such an understanding may help these actors use financial resources efficiently.

Originality/value

To the authors’ best knowledge, little research has addressed whether there are any differences in financing patterns over the firm life cycle.

Place, publisher, year, edition, pages
2016. Vol. 17, no 2, 245-260 p.
Keyword [en]
Capital structure, SMEs, Debt financing, Life cycle stages
National Category
Social Sciences
Identifiers
URN: urn:nbn:se:miun:diva-28806DOI: 10.1108/JRF-04-2015-0040ISI: 000382560000006Scopus ID: 2-s2.0-84997207589OAI: oai:DiVA.org:miun-28806DiVA: diva2:971583
Available from: 2016-09-16 Created: 2016-09-16 Last updated: 2016-12-15Bibliographically approved

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Yazdanfar, DarushÖhman, Peter
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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf