Professional Documents
Culture Documents
Capital Structure Dynamics Among SMEs Swedish Empirical Evidence
Capital Structure Dynamics Among SMEs Swedish Empirical Evidence
Capital Structure Dynamics Among SMEs Swedish Empirical Evidence
www.emeraldinsight.com/1526-5943.htm
Abstract
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.
Keywords Capital structure, SMEs, Debt financing, Life cycle stages
Paper type Research paper
1. Introduction
The importance of small and medium-sized enterprises (SMEs) for economic growth is
well established, and capital availability is considered a precondition for SME
investment and survival (Carpenter and Petersen, 2002; Beck et al., 2005; Fagiolo and
Luzzi, 2006; Hutchinson and Xavier, 2006; Oliveira and Fortunato, 2006). At the same
time, financing constraints are regarded as a main barrier to firm growth (Holtz-Eakin
et al., 1994; Chittenden et al., 1996; Cooley and Quadrini, 2001; Becchetti and Trovato,
2002; Reid, 2003). As documented by Mach and Wolken (2011), credit-constrained SMEs
are significantly more likely to exit the market than are unconstrained ones. In the same
vein, Rajan and Zingales (1995) found that firms with better access to external capital
grow faster, and Coad et al. (2013) argued that the ability to obtain external financing is
an important factor in firm development.
The existence of financial constraints among SMEs has been explained by capital The Journal of Risk Finance
market imperfections (Stiglitz and Weiss, 1981). High costs related to information Vol. 17 No. 2, 2016
pp. 245-260
asymmetry and moral hazard agency conflicts often force small businesses to use © Emerald Group Publishing Limited
1526-5943
capital generated internally (Myers, 1984, 2001; Carpenter and Petersen, 2002). DOI 10.1108/JRF-04-2015-0040
JRF According to Irwin and Scott (2010), firms suffer from information asymmetry and
17,2 agency conflict costs primarily during the start-up stage because of their lack of track
records. Accessing debt financing is therefore a challenge for small businesses at this
early stage (Barton and Matthews, 1989; Hamilton and Fox, 1998). In particular, small
start-up firms typically experience more difficulties than do their larger and older
counterparts in accessing initial debt capital (Cavalluzzo and Cavalluzzo, 1998;
246 Cavalluzzo et al., 2002; Blanchflower et al., 2003). In addition, Klapper et al. (2010)
demonstrated that younger businesses tend to rely far less on bank loans than do older
firms.
Serrasqueiro and Nunes (2012) and Martin and Daniel (2013), among others, suggest
that firm age is an influential factor affecting firms’ access to external capital.
Simultaneously, it is suggested that the relationship between firm age and capital
structure is still largely unexplored and warrants further attention (Coad et al., 2013;
Mac an Bhaird and Lucey, 2014). Previous studies have used various samples, methods
and measures, but they have seldom compared firms in the earliest life cycle stages. In
response to calls for further studies, and to the fact that financing behaviour is context
dependent, the present study contributes to the capital structure life cycle literature in
several ways. Although the global financial crisis has highlighted the importance of
firm debt ratios, few empirical studies of capital structure dynamics have been
performed since 2009. To the authors’ best knowledge, the present study is one of the
largest empirical investigations of capital structure life cycle among SMEs using a
relatively recent and longitudinal data set and several univariate and multivariate
statistical techniques. The study investigates differences in financing patterns among
firms across six life cycle stages. In line with previous research, this study also considers
other firm characteristic variables (i.e. firm size and industry affiliation). For example,
Mac an Bhaird and Lucey (2010) identified a relationship between firm size and debt
capital availability, and Mac an Bhaird and Lucey (2014) found that differences in
industry affiliation influence firms’ financing patterns.
The remainder of the paper is organized as follows. Section 2 presents the theoretical
framework, previous empirical studies and hypotheses. Section 3 outlines the data
sample, variables and specification of the binary logistic regression model. The
empirical results are reported in Section 4, and Section 5 concludes the paper.
Where,
250 Y1 ⫽ STD, debt repayable within one year in percentage of total assets;
Y2 ⫽ LTD, debt repayable beyond one year in percentage of total assets;
Y3 ⫽ TD in percentage of total assets;
Y4 ⫽ EQ in percentage of total assets;
a1, a2, a3, a4 ⫽ constants;
X1 ⫽ life cycle stages (i.e. age categories): age category 1, ⱕ5 years; age
category 2, 6-10 years; age category 3, 11-15 years; age category 4,
16-20 years; age category 5, 21-25 years; and age category 6, ⬎25
years;
X2 ⫽ size of SMEs, the natural logarithm of sales;
X3 ⫽ industry dummy (coded as: 1 – retail sector, 2 – metal sector, 3 –
consulting sector, 4 – health care sector and 5 – construction sector);
and
e ⫽ error term.
4. Empirical results
4.1 Descriptive analysis
Table I presents the descriptive statistics for the key characteristics of the sampled
firms. The firms included belong to the retail (45 per cent), metal (18 per cent),
consulting (16 per cent), healthcare (11 per cent) and construction (10 per cent)
industry sectors. Comparing the five groups, construction firms tend, on average, to
have the highest level of STD, while firms operating in the metal sector account for
the highest level of LTD. On average, firms operating in the healthcare industry tend
to have the lowest TD ratio and firms in the construction industry the highest. The
ANOVA results indicate significant differences in the debt variables across
industry sectors at the 1 per cent level. Moreover, the sampled SMEs are, on average,
characterized by an age of nearly 20 years and approximately seven employees
each.
Metal
Mean 0.32 0.09 0.41 0.59 23.8 13.6 3.94
SD 0.15 0.13 0.172 0.17 14.99 20.95 0.57
No. of
observations 11,232 11,232 11,232 11,232 11,232 11,232 11,232
No. of firms 2,808 2,808 2,808 2,808 2,808 2,808 2,808
% firms 0.18 0.18 0.18 0.18 0.18 0.18 0.18
Consulting
Mean 0.35 0.04 0.38 0.62 16.38 3.76 3.38
SD 0.17 0.10 0.18 0.18 11.32 7.62 0.39
No. of
observations 10,144 10,144 10,144 10,144 10,144 10,144 10,144
No. of firms 2,536 2,536 2,536 2,536 2,536 2,536 2,536
% firms 0.16 0.16 0.16 0.16 0.16 0.16 0.16
Healthcare
Mean 0.21 0.04 0.25 0.75 15.28 3.24 3.41
SD 0.11 0.08 0.13 0.14 9.48 6.13 0.35
No. of
observations 7,180 7,180 7,180 7,180 7,180 7,180 7,180
No. of firms 1,795 1,795 1,795 1,795 1,795 1,795 1,795
% firms 0.11 0.11 0.11 0.11 0.11 0.11 0.11
Construction
Mean 0.38 0.08 0.46 0.54 19.25 7.00 3.69
SD 0.17 0.12 0.17 0.17 12.57 13.62 0.56
No. of
observations 6,600 6,600 6,600 6,600 6,600 6,600 6,600
No. of firms 1,650 1,650 1,650 1,650 1,650 1,650 1,650
% firms 0.10 0.10 0.10 0.10 0.10 0.10 0.10
Total
Mean 0.34 0.07 0.41 0.59 20.22 7.63 4.31
SD 0.17 0.12 0.178 0.20 14.11 14.38 0.92
No. of
observations 63,808 63,808 63,808 63,808 63,808 63,808 63,808
No. of firms 15,952 15,952 15,952 15,952 15,952 15,952 15,952
ANOVA
F 1510.0** 477.2** 2039.8** 6255.8** 698.4** 887.7** 89741.3**
ANOVA
Table I.
Sig. 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
Mean, standard
Notes: STD ⫽ short-term debt; LTD ⫽ long-term debt; TD ⫽ total debt; EQ ⫽ equity capital; Age ⫽ the average age of the deviation and
sampled firms; Number of employees ⫽ the average number of employees in the sampled firms; Size ⫽ the natural logarithm number of firms
of sales; * and ** indicate significance at the 0.05 and 0.01 levels, respectively (2009-2012)
JRF Life cycle stages STD LTD TD EQ Size
17,2
First stage
Mean 0.387 0.050 0.437 0.563 4.085
SD 0.167 0.101 0.176 0.176 0.994
No. of observations 6,148 6,148 6,148 6,148 6,148
252 Second stage
Mean 0.360 0.057 0.417 0.583 4.328
SD 0.167 0.108 0.195 0.177 0.933
No. of observations 11,664 11,664 11,664 11,664 11,664
Third stage
Mean 0.343 0.067 0.410 0.590 4.404
SD 0.168 0.116 0.201 0.181 0.916
No. of observations 8,684 8,684 8,684 8,684 8,684
Fourth stage
Mean 0.321 0.073 0.394 0.606 4.286
SD 0.161 0.120 0.201 0.178 0.885
No. of observations 12,203 12,203 12,203 12,203 12,203
Fifth stage
Mean 0.318 0.074 0.392 0.608 4.288
SD 0.160 0.121 0.201 0.177 0.886
No. of observations 13,483 13,483 13,483 13,483 13,483
Sixth stage
Mean 0.327 0.074 0.401 0.599 4.774
SD 0.164 0.123 0.193 0.178 0.834
No. of observations 11,626 11,626 11,626 11,626 11,626
Total
Mean 0.338 0.068 0.406 0.594 4.380
SD 0.166 0.117 0.199 0.178 0.923
No. of observations 63,808 63,808 63,808 63,808 63,808
ANOVA
F 227.9** 67.7** 2039.8** 641.0** 641.0**
ANOVA
Sig. 0.0000 0.0000 0.0000 0.0000 0.0000
Notes: STD ⫽ short-term debt; LTD ⫽ long-term debt; TD ⫽ total debt; EQ ⫽ equity capital; Size ⫽
Table II. the natural logarithm of sales; first stage (age category 1), ⱕ5 years; second stage (age category 2), 6-10
Summary of years; third stage (age category 3), 11-15 years; fourth stage (age category 4), 16-20 years; fifth stage (age
descriptive statistics category 5), 21-5 years; and sixth stage (age category 6), ⬎25 years; * and ** indicate significance at the
(2009-2012) 0.05 and 0.01 levels, respectively
cent), after which it decreases to its lowest level (31.8 per cent) in the fifth stage.
Compared with the other financing sources, LTD is low across all life cycle stages,
though it increases slightly across the stages. Comparing STD and LTD, one can
conclude that the former is significantly higher than the latter in all age categories.
Moreover, the results indicate that the sampled firms grow in size with age, and that the Capital
financing ratios and size differ significantly between life cycle stages. structure
dynamics
4.3 Correlation analysis
Pearson correlation analysis was performed to investigate the relationships between the
variables. As indicated by Table III, there is a negative and significant relationship
between life cycle stage (i.e. age category) and STD (R ⫽ ⫺0.115; p ⬍ 0.000). On average,
253
older firms are less likely to use STD than are younger ones. In contrast, older firms tend
to use more LTD than do younger ones (R ⫽ 0.068; p ⬍ 0.000). In total, older firms are
less likely to use debt than are younger ones (R ⫽ ⫺0.063; p ⬍ 0.000). As can be
observed, the relationship between STD and LTD is significantly negative, indicating
that they are substitutes for each other.
Table III also shows that there is a positive and significant relationship between firm
size and the debt variables, implying that smaller firms on average are less likely to
finance their operations with STD or LTD than are larger firms. The Pearson correlation
results further suggest a positive and significant correlation between firm age and size.
The results indicate low correlations between the independent variables implying that
the risk of multicollinearity is low.
254
Table III.
between the
relationships
analysis of the
Pearson correlation
variables (2009-2012)
Life cycle
Variables stage STD LTD TD EQ Size
Notes: STD ⫽ short-term debt; LTD ⫽ long-term debt; TD ⫽ total debt; EQ ⫽ equity capital; Size ⫽ the natural logarithm of sales; * and ** indicate
significance at the 0.05 and 0.01 levels, respectively
Dependent Independent Standard No. of Durbin –
variable variables Coefficient error t P⬎t observations Parms RMSE R2 F P VIF Watson
STD Stage ⫺0.014 0.0003 –37.60 0.000** 63,808 4 0.16094 0.056 1,252.255 0.0000 1.024 1.838
Size 0.025 0.0007 31.16 0.000** 1.331
Industry ⫺0.013 0.0005 ⫺23.11 0.000** 1.315
Constant 0.321 0.0046 69.81 0.000**
LTD Stage 0.004 0.0002 14.26 0.000** 63,808 4 0.11558 0.018 387.1777 0.0000 1.024 1.971
Size ⫺0.001 0.0005 ⫺1.79 0.074 1.331
Industry ⫺0.011 0.0004 ⫺26.59 0.000** 1.315
Constant 0.086 0.0033 25.90 0.000**
TD Stage ⫺0.011 0.0004 ⫺25.50 0.000** 63,808 4 0.17268 0.068 1,554.113 0.0000 1.024 1.843
Size 0.023 0.0008 27.84 0.000** 1.331
Industry ⫺0.025 0.0006 ⫺39.33 0.000** 1.315
Constant 0.406 0.0049 82.40 0.000**
EQ Stage 0.011 0.0004 25.01 0.000** 63,808 4 0.18236 0.158 3,981.936 0.0000 1.024 1.654
Size ⫺0.017 0.0009 ⫺19.76 0.000** 1.331
Industry ⫺0.067 0.0006 ⫺99.07 0.000** 1.315
Constant 0.742 0.0052 142.53 0.000**
Notes: STD ⫽ short-term debt; LTD ⫽ long-term debt; TD ⫽ total debt; EQ ⫽ equity capital; * and ** indicate significance at the 0.05 and 0.01 levels,
respectively
(2009-2012)
Table IV.
255
dynamics
structure
Capital
regression analysis
multivariate
results of the
Summary of the
JRF previous findings, for example, of Talberg et al. (2008) and Mac an Bhaird and Lucey
17,2 (2010, 2014).
5. Concluding remarks
This paper empirically examines hypotheses drawn from pecking order theory
256 regarding the impact of firm age on capital structure. Given that the accessibility and
employment of capital are main preconditions for SME investment, growth and
survival, this study focuses on how SMEs use financing sources, debt capital in
particular. Significant differences were found in the use of financing sources between
the six age categories investigated (cf. Mac an Bhaird and Lucey, 2011). Overall, older
firms tend to rely less on debt capital than do younger ones. This may be because older
firms realize opportunities to use internal financing sources more than do their younger
counterparts (Gregory et al., 2005; Mac an Bhaird and Lucey, 2010; Yazdanfar, 2012).
Due to costs related to agency conflicts, SME owners and managers prefer to be
autonomous and retain control over their firms. They therefore follow a hierarchy (i.e.
pecking order) in using capital, preferring internal capital to external capital sources.
When focusing on differences between STD and LTD, the present study suggests
different patterns depending on firm age. While younger SMEs have higher STD ratios
than do older ones, older SMEs have higher LTD ratios than do their younger
counterparts. These patterns support previous findings (Serrasqueiro and Nunes, 2012).
In line with Mac an Bhaird and Lucey (2011), this study suggests that the life cycle
model provides an adequate theoretical framework for describing capital structure
dynamics, and that firm age is a determinant of the financing pattern. The underlying
assumption is that the financing patterns of firms change constantly through several
development stages. At the same time, SME financing patterns seem to be influenced by
size and industry affiliation.
The present findings can be used for a range of purposes, including to improve our
understanding of SME financing behaviour across different stages of the firm life cycle.
Creditors and policy makers may find the results useful in coordinating SME financing
support in the earliest life cycle stages, when firms may have particular difficulties in
obtaining external financing (Cavalluzzo et al., 2002; Blanchflower et al., 2003; Klapper
et al., 2010). Firm owners can apply the present findings to develop strategies to use
financial resources more efficiently and to avoid financial distress.
This study is, admittedly, associated with a number of limitations. The data sample
consists only of SMEs operating in a particular socio-economic context. As a result, the
findings cannot be generalized to firms operating in other contexts. It seems particularly
relevant to suggest further studies in various socio-economic contexts, not least because
Hall et al. (2004) and Mac an Bhaird and Lucey (2014) note that country differences are
major determinants of firm financing patterns. In addition, the present study is based on
the mean debt values and equity ratios of firms. In fact, reality is more complicated than
the situation captured by mean values, and financing at the individual firm level may
differ from the results presented here. The results should therefore be treated with
caution, and not be applied beyond the scope of this study. Due to data limitations, the
present study considered only a few firm-level variables. Future studies could therefore
consider other variables such as collateral and internal financing sources. Moreover,
Romano et al. (2000) and Irwin and Scott (2010) suggest that the characteristics of firm
founders may affect a firm’s opportunities to access external capital.
Despite the limitations of this study, it supplements the literature by finding that Capital
older firms tend to use less debt capital than do younger firms. Further studies of this structure
topic are encouraged. In line with Yazdanfar and Öhman’s (2015) suggestion, studies dynamics
using the firm life cycle as a starting point could productively focus on both financing
sources and firm profitability.
References 257
Anthony, J. and Ramesh, K. (1992), “Association between accounting performance measures and
stock prices: a test of the life cycle hypothesis”, Journal of Accounting and Economics,
Vol. 15 Nos 2/3, pp. 203-227.
Barton, S. and Matthews, C. (1989), “Small firm financing: implications for strategic
management”, Journal of Small Business Management, Vol. 27 No. 1, pp. 1-7.
Becchetti, L. and Trovato, G. (2002), “The determinants of firm growth for small and medium sized
firms: the role of the availability of external finance”, Small Business Economics, Vol. 19
No. 4, pp. 291-306.
Beck, T. and Demirgüç-Kunt, A. (2006), “Small and medium-size enterprises: access to finance as
a growth constraint”, Journal of Banking & Finance, Vol. 30 No. 11, pp. 2931-2943.
Beck, T., Demirgüç-Kunt, A. and Maksimovic, V. (2005), “Financial and legal constraints to
growth: does firm size matter?”, Journal of Finance, Vol. 60 No. 1, pp. 137-177.
Berger, A.N. and Udell, G.F. (1998), “The economics of small business finance: the roles of private
equity and debt markets in the financial growth cycle”, Journal of Banking & Finance,
Vol. 22 Nos 6/8, pp. 613-673.
Blanchflower, D.G., Levine, P.B. and Zimmerman, D.J. (2003), “Discrimination in the
small-business credit market”, Review of Economics and Statistics, Vol. 85 No. 4,
pp. 930-943.
Bougheas, S., Mizen, P. and Yalcin, C. (2005), “Access to external finance: theory and evidence on
the impact of monetary policy and firm-specific characteristics”, Journal of Banking &
Finance, Vol. 30 No. 1, pp. 199-227.
Carpenter, R.E. and Petersen, B.C. (2002), “Is the growth of small firms constrained by internal
finance?”, Review of Economics and Statistics, Vol. 84 No. 2, pp. 298-309.
Cassar, G. (2004), “The financing of business start-ups”, Journal of Business Venturing, Vol. 19
No. 2, pp. 261-283.
Cavalluzzo, K.S. and Cavalluzzo, L.C. (1998), “Market structure and discrimination: the case of
small businesses”, Journal of Money, Credit and Banking, Vol. 30 No. 4, pp. 771-792.
Cavalluzzo, K.S., Cavalluzzo, L.C. and Wolken, J.D. (2002), “Small business financing and
discrimination: evidence from a new survey”, Journal of Business, Vol. 75 No. 4, pp. 641-679.
Chittenden, F., Hall, G. and Hutchinson, P. (1996), “Small firm growth, access to capital markets
and financial structure: review of issues and an empirical investigation”, Small Business
Economics, Vol. 8 No. 1, pp. 59-67.
Coad, A., Segarra, A. and Teruel, M. (2013), “Like milk or wine: does firm performance improve
with age?”, Structural Change and Economic Dynamics, Vol. 24 No. 1, pp. 173-189.
Cooley, T. and Quadrini, V. (2001), “Financial markets and firm dynamics”, American Economic
Review, Vol. 91 No. 5, pp. 1286-1310.
Diamond, D.W. (1989), “Reputation acquisition in debt markets”, Journal of Political Economy,
Vol. 97 No. 4, pp. 828-862.
JRF Dickinson, V. (2011), “Cash flow patterns as a proxy for firm life cycle”, Accounting Review, Vol. 86
No. 6, pp. 1969-1994.
17,2
Fagiolo, G. and Luzzi, A. (2006), “Do liquidity constraints matter in explaining firm size and
growth? Some evidence from the Italian manufacturing industry”, Industrial and Corporate
Change, Vol. 15 No. 1, pp. 1-39.
Fama, E.F. and French, K.R. (2002), “Testing trade-off and pecking order predictions about
258 dividends and debt”, Review of Financial Studies, Vol. 15 No. 1, pp. 1-33.
Frielinghaus, A., Mostert, B. and Firer, C. (2005), “Capital structure and the firm’s life stage”, South
African Journal of Business Management, Vol. 36 No. 4, pp. 9-18.
García-Teruel, P. and Martínez-Solano, P. (2007), “Short-term debt in Spanish SMEs”,
International Small Business Journal, Vol. 25 No. 6, pp. 579-602.
Gregory, B.T., Rutherford, M.W., Oswald, S. and Gardiner, L. (2005), “An empirical investigation
of the growth cycle theory of small firm financing”, Journal of Small Business Management,
Vol. 43 No. 4, pp. 382-392.
Hall, G., Hutchinson, P. and Michaelas, N. (2004), “Determinants of the capital structures of
European SMEs”, Journal of Business Finance & Accounting, Vol. 31 Nos 5/6, pp. 711-728.
Hamilton, R.T. and Fox, M.A. (1998), “The financing preferences of small firm owners”,
International Journal of Entrepreneurial Behaviour & Research, Vol. 4 No. 3, pp. 239-248.
Harris, M. and Raviv, A. (1991), “The theory of capital structure”, Journal of Finance, Vol. 49 No. 1,
pp. 297-355.
Holtz-Eakin, D., Joulfaian, D. and Rosen, H.S. (1994), “Sticking it out: entrepreneurial survival and
liquidity constraints”, Journal of Political Economy, Vol. 102 No. 1, pp. 53-75.
Hutchinson, J. and Xavier, A. (2006), “Comparing the impact of credit constraints on the growth of
SMEs in a transition country with an established market economy”, Small Business
Economics, Vol. 27 No. 2, pp. 169-179.
Irwin, D. and Scott, J.M. (2010), “Barriers faced by SMEs in raising bank finance”, International
Journal of Entrepreneurial Behaviour & Research, Vol. 16 No. 3, pp. 245-259.
Klapper, L., Laeven, L. and Rajan, R. (2010), “Entry regulation as a barrier to entrepreneurship”,
Journal of Financial Economics, Vol. 82 No. 3, pp. 591-623.
La Rocca, M., La Rocca, T. and Cariola, A. (2011), “Capital structure decisions during a firm’s life
cycle”, Small Business Economics, Vol. 37 No. 1, pp. 107-130.
López-Gracia, J. and Sánchez-Andújar, S. (2007), “Financial structure of the family business:
evidence from a group of small Spanish firms”, Family Business Review, Vol. 20 No. 4,
pp. 269-287.
Mac an Bhaird, C. and Lucey, B. (2010), “Determinants of capital structure in Irish SMEs”, Small
Business Economics, Vol. 35 No. 3, pp. 357-375.
Mac an Bhaird, C. and Lucey, B. (2011), “An empirical investigation of the financial growth life
cycle”, Journal of Small Business and Enterprise Development, Vol. 18 No. 4, pp. 715-731.
Mac an Bhaird, C. and Lucey, B. (2014), “Culture’s influences: an investigation of inter-country
differences in capital structure”, Borsa Istanbul Review, Vol. 14 No. 1, pp. 1-9.
Mach, T.L. and Wolken, J.D. (2011), “Examining the impact of credit access on small firm
survivability”, Finance and Economics Discussion Series 2011-35, Board of Governors of
the Federal Reserve System (US).
Martin, M.M. and Daniel, K.T. (2013), “Does firm profile influence financial access among small
and medium enterprises in Kenya?”, Asian Economic and Financial Review, Vol. 3 No. 6,
pp. 714-723.
Modigliani, F. and Miller, M.H. (1958), “The cost of capital, corporation finance and the theory of Capital
investment”, American Economic Review, Vol. 48 No. 3, pp. 261-297.
structure
Myers, S.C. (1977), “Determinants of corporate borrowing”, Journal of Financial Economics, Vol. 5
No. 2, pp. 147-175.
dynamics
Myers, S.C. (1984), “The capital structure puzzle”, Journal of Finance, Vol. 39 No. 3, pp. 575-592.
Myers, S.C. (2001), “Capital structure”, Journal of Economic Perspectives, Vol. 15 No. 2, pp. 81-102.
Myers, S.C. and Majluf, N.S. (1984), “Corporate financing and investment decisions when firms 259
have information that investors do not have”, Journal of Financial Economics, Vol. 13 No. 2,
pp. 187-221.
Ngoc, T., Le, T. and Nguyen, T. (2009), “The impact of networking on bank financing: the case of
small and medium enterprises in Vietnam”, Entrepreneurship Theory and Practice, Vol. 33
No. 4, pp. 867-887.
Nico, D. and Van Hulle, C. (2010), “Internal capital markets and capital structure: bank versus
internal debt”, European Financial Management, Vol. 16 No. 3, pp. 345-373.
Oliveira, B. and Fortunato, A. (2006), “Firm growth and liquidity constraints: a dynamic analysis”,
Small Business Economics, Vol. 27 Nos 2/3, pp. 139-156.
Petersen, M.A. and Rajan, R.G. (1994), “The benefits of lending relationships: evidence from small
business data”, Journal of Finance, Vol. 49 No. 1, pp. 3-37.
Rajan, R. and Zingales, L. (1995), “What do we know about capital structure? Some evidence from
international data”, Journal of Finance, Vol. 50 No. 50, pp. 1421-1460.
Reid, G.C. (2003), “Trajectories of small business financial structure”, Small Business Economics,
Vol. 20 No. 4, pp. 273-285.
Romano, C.A., Tanewski, G.A. and Smyrnois, K.X. (2000), “Capital structure decision making: a
model for family business”, Journal of Business Venturing, Vol. 16 No. 3, pp. 285-310.
Sakai, K., Uesugi, I. and Watanabe, T. (2010), “Firm age and the evolution of borrowing costs:
evidence from Japanese small firms”, Journal of Banking & Finance, Vol. 34 No. 8,
pp. 1970-1981.
Sánchez-Vidal, J. and Martin-Ugedo, J.F. (2012), “Are the implications of the financial growth cycle
confirmed for Spanish SMEs?”, Journal of Business Economics and Management, Vol. 13
No. 4, pp. 637-665.
Serrasqueiro, Z. and Nunes, P.M. (2012), “Is age a determinant of SMEs’ financing decisions?
Empirical evidence using panel data models”, Entrepreneurship Theory and Practice,
Vol. 36 No. 4, pp. 627-654.
Statistics Sweden, S.C.B. (2014), “Företagens ekonomi 2012”, available at: www.scb.se/sv_/Hitta-
statistik/Statistik-efter-amne/Naringsverksamhet/Naringslivets-struktur/Foretagens-
ekonomi/ (accessed 1 December 2014).
Stiglitz, J.E. and Weiss, A. (1981), “Credit rationing in markets with imperfect information”,
American Economic Review, Vol. 71 No. 3, pp. 393-410.
Swedish Central Bank (2013), “International dependence and monetary policy”, available at:
www.riksbank.se (accessed 3 March 2014).
Talberg, M., Winge, C., Frydenberg, S. and Westgaard, S. (2008), “Capital structure across
industries”, International Journal of the Economics of Business, Vol. 15 No. 2, pp. 181-200.
Tam, S., Lee, W.B. and Chung, W.W.C. (2001), “Growth of a small manufacturing enterprise and
critical factors for success”, International Journal of Manufacturing Technology and
Management, Vol. 3 Nos 4/5, pp. 444-454.
JRF Tian, L., Han, L. and Zhang, S. (2015), “Business life cycle and capital structure: evidence from
Chinese manufacturing firms”, China & World Economy, Vol. 23 No. 2, pp. 22-39.
17,2
Timmons, J.A. and Spinelli, S. (2004), New Venture Creation: Entrepreneurship for the 21st
Century, McGraw-Hill, Boston, MA.
Vieira, E.S. (2014), “Capital structure determinants in the context of listed family firms”, Journal of
Economy, Business and Financing, Vol. 2 No. 1, pp. 12-25.
260 Whited, T.M. and Wu, G. (2006), “Financial constraints risk”, Review of Financial Studies, Vol. 19
No. 2, pp. 531-559.
Woldie, A., Mwita, J.I. and Saidimu, J. (2012), “Challenges of microfinance accessibility by SMEs in
Tanzania”, Thunderbird International Business Review, Vol. 54 No. 4, pp. 567-580.
Yazdanfar, D. (2012), “Agency costs theory and the financing life cycle: empirical evidence from
Swedish firm-level data”, The International Journal of Business and Globalisation, Vol. 8
No. 2, pp. 226-238.
Yazdanfar, D. and Öhman, P. (2015), “Life cycle and performance among SMEs: Swedish empirical
evidence”, Journal of Risk Finance, Vol. 15 No. 5, pp. 555-571.
For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com