The paper examines the impact of key productivity determinants at the firm level using data on 24,257 Swedish micro firms, including approximately 194,000 observations for the 2007-2008 period. The regression model includes a firm-level measure of total factor productivity as the dependent variable and capital structure and other relevant control variables as independent variables. Analysis reveals that firm-level variables, such as lagged productivity, size, age, profitability, short-term debt ratio, and industry affiliation, significantly affect firm productivity. Agency cost theory seems applicable in partly explaining the relationship between capital structure and productivity. Copyright © 2012 Inderscience Enterprises Ltd.