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SMEs capital
SMEs capital structure: trade-off structure
or pecking order theory: a
systematic review
Lisana B. Martinez 105
Instituto de Investigaciones Económicas y Sociales del Sur – (IIESS),
Received 13 December 2017
CONICET-UNS, Bahía Blanca, Argentina; Revised 19 March 2018
Departamento de Economía, Universidad Nacional del Sur (UNS), 23 April 2018
Accepted 11 May 2018
Bahía Blanca, Argentina and
Universidad Provincial del Sudoeste, Bahía Blanca, Argentina
Valeria Scherger
Departamento de Economía, Universidad Nacional del Sur (UNS),
Bahía Blanca, Argentina, and
M. Belén Guercio
Instituto de Investigaciones Económicas y Sociales del Sur – (IIESS),
UNS-CONICET, Bahía Blanca, Argentina and
Universidad Provincial del Sudoeste, Bahía Blanca, Argentina

Abstract
Purpose – The purpose of this paper is to organize and present the literature related to firm’s capital
structure across the years and find the most relevant publications and authors in the research area. Moreover,
the authors pretend to fill the gap in the literature by studying different works and their compatibility with
the main theories.
Design/methodology/approach – The systematic literature review is conducted by using the Scopus
database. The methodology applied is through a concise searching considering keywords, the most cited papers,
the latest publications and theories that explain small and medium enterprises (SMEs) capital structure.
Findings – Some key aspects about the capital structure of firms and SMEs are identified, such as
documents per year, type of publications, the most used languages, the top journals, the most cited papers, the
most productive and influential authors and the latest published papers.
Research limitations/implications – The information presented is only informative from the Scopus
database. Hence, this work only gives a general orientation of the most relevant research and its tendency
of this database. More exhaustive works could be done using different keywords and analyzing other
firms’ characteristics.
Practical implications – This kind of study is effective in evaluating the scientific production and to
find the most important contributions of the subject. Furthermore, this information is useful for
researchers’ studies on SME capital structure to underline the research direction and to be acquainted with
the literature tendency.
Originality/value – There are not similar works that delve into the literature respect to SME capital
structure and compare the main theories in relation to empirical works. Therefore, a synthesized evolution of
previous works related to the capital structure of firms and SMEs is presented.
Keywords Capital structure, SMEs, Systematic literature review, Financing, Pecking order theory,
Trade-off theory
Paper type Research paper

1. Introduction
Several reasons highlight the interest in encouraging the development of small and medium
Journal of Small Business and
enterprises (SMEs), since they are the mainstay of the economic activity, an important Enterprise Development
Vol. 26 No. 1, 2019
source for job creation, and contribute to the growth of the Gross Domestic Product (GDP). pp. 105-132
© Emerald Publishing Limited
1462-6004
JEL Classification — G32, G40, D21 DOI 10.1108/JSBED-12-2017-0387
JSBED Czarniewski (2016) considered that SMEs not only affect positively the growth of GDP, but
26,1 also has reinforced the social impact generated, through the creation of jobs, and the
resulting increase in the education level and, in turn, in the quality of human capital.
The latter is one of the main objectives of social and economic policies. Hasan et al. (2017)
studied the up-and-coming transition of Central and Eastern European countries from
planned economies toward market-oriented economies. They have affirmed that this
106 transition would not have been possible without the increased number of SMEs (more than
95 percent of all companies in the region) and have highlighted the participation of banks in
their financial capital structure.
Given the significance of SMEs, it is relevant to know one of the main problems that this
type of companies faces. One of the main barriers for the development and growth of SMEs
is financial access. Many works have affirmed that these companies find greater limitations
to access to external financing respect to large companies, and those limitations arise mainly
due to asymmetric information problems between borrowers and lenders (Beck et al., 2005;
Bebczuk and Haimovich, 2007; Bebczuk, 2010).
Therefore, it is important to study SMEs financial decisions, focused on their capital
structure in face of the existence of financial constraints.
Capital structure is essentially concerned with how a firm finances its overall operations
and progress by using different sources of funds. In others words, the capital structure
of firms is the result of a set of situations, which combines financing decisions of
entrepreneurs, credit rationing of providers of funds and market conditions, which are all
conditioned by the phenomenon of asymmetric information. The access to external
financing, especially for the SMEs, is traditionally a topic of great economic interest.
There are many different funds related to their financial needs. One of them is through
debt in the form of bond issues and credits or long-term notes payable. The equity is classified
as common stock, preferred stock or retained earnings. Short-term debt, such as working
capital requests, is also considered to be part of the capital structure. Companies used to issue
debt because of tax advantages, given that interest payments are tax-deductible. Debt also
allows the companies or business to retain ownership, unlike equity. Additionally, in times of
low interest rates, debt is abundant and easy to access. Equity is more expensive than debt,
especially when interest rates are small. However, unlike debt, equity does not need to be paid
back if earnings decline.
In this line of study, there are many research works (Aybar-Arias et al., 2012;
Briozzo et al., 2016; Guercio et al., 2016; McNamara et al., 2017; Martinez et al., 2017) that have
analyzed the most recognized theories related to firms’ capital structure. In general, they
have compared the capital structure of different groups of firms and have related it to the
trade-off (TO) and pecking order (PO) concepts.
This research contributes to the field of firms’ capital structure in the following ways.
First, a systematic literature review (SLR) is performed, regarding the general
characteristics of the literature published in the Scopus database related to capital
structure, from 1959-2017, considering the evolution of the research theme over that period,
types of publications, languages, areas of study, the most cited papers, among others.
Second, those publications specifically related to SME capital structure are analyzed.
Information related to the most recent published articles is collected, considering empirical
and theoretical works. Finally, a complete revision from SME capital structure is
presented, taking into account a comparative analysis of the main theories presented in
the literature.
The importance of this paper is to examine what is published with regards to capital
structure, and in particular to SME capital structure. As it is commonly known, financial
markets have changed over time, in the same line as globalization. Hence, it is probable that
the firm’s capital structure has developed over time. So, given the importance of the research
study, considering that it covers different fields, we are able to detect the main journals in SMEs capital
which this kind of studies are published and the most recognized authors in the subject. structure
As far as we are concerned, although there are interesting literature reviews related to
capital structure, we have not found a specific work that focuses on SME capital structure
and the prevalence of the main theories in the literature.
The remainder of the paper is organized as follows. In the next section, we present the
state of the art of the main theories analyzed previously. In Section 3, we introduce the 107
methodology based on the concept of SLR. Additionally, Section 4 provides a brief review
related to the most important papers concerning firms’ capital structure. Section 5 focuses
on SME capital structure revision, considering the evolution of the research over time, and
the most cited and recognized authors related to the topic of this paper. Section 6 concludes
and briefly presents the most recognized theories.

2. State of the art

Many theories attempt to explain financial constraints focusing on capital structure.
As Forte et al. (2013) mentioned, since 1950, capital structure has developed into controversial
research areas in the field of corporate finances.
One of the most famous discussions on this theme is approached by Modigliani and
Miller (1958), who have considered that the market value of each enterprise is independent
of its capital structure.
Some years later, Modigliani and Miller (1963) analyzed the possibility to dismiss the
original assumptions of perfect competition markets and admitted that indebtedness has a
tax advantage, given that interests are deductible from the income tax. Even so, it does not
mean that companies must at all times try to use the mass of possible debt. The authors
have also highlighted the existence of other relevant factors in the financing decisions that
are not fully covered within the context of the static equilibrium models.
In this framework, the TO theory raises, and considers the effects of the entire industry
(taxes, bankruptcy costs and agency problems). It also predicts an optimal structure as a result
of the balancing costs and benefits of issuing debt and capital. In this theoretical approach,
leverage is considered advantageous (under certain conditions), and owner-managers prefer to
use debt even if there are internal funds available. This theory assumes that the optimal
capital structure is the result of equalizing the benefits of leverage (mainly tax savings) and the
costs of financial difficulties. Then, if companies become indebted, the tax savings are
expected to be greater, as well as the costs arising from the risk of default (Briozzo et al., 2016).
Therefore, this theory proposes to avoid the extreme use of leverage and rationalizes the
indebtedness indexes (Brealey et al., 2006).
Subsequently, Miller (1977) incorporated into the model the taxes on the income received
by the investors, whether in the form of income of shares (dividends and profits from
capital) or interest, in addition to tax benefits (Rivera Godoy, 2002). The conclusion of this
model is that the tax advantage of getting into debt is canceled when both types of taxes are
considered, summarizing the thesis of the irrelevance of the capital structure in terms of the
value of the company.
As an alternative to previous developments, Myers (1984) and Myers and Majluf (1984) have
proposed the PO theory, that describes a hierarchical order in financing choices and has as
central axis the asymmetric information between lenders and companies. Due to the fact that
companies have more information on their future than lenders, the need for monitoring
increases borrowing costs, which encourages companies to be financed with inside funds in the
first place. Myers (1984) argued that companies prefer the reinvestment of profits in order to
avoid adverse selection problems. When these funds are depleted, companies are financed with
bank debt, and lastly, in the stock market. During the company business cycle, information
asymmetries decrease and the financial access improves in respect of cost and terms.
JSBED The authors of the PO theory explain that this hierarchical order is the result of greater
26,1 flexibility and lower transaction costs of internal vs external resources.
In this stream, the leverage is considered to be disadvantageous compared to internal
sources. Owner-managers prefer to use internal funds first, but if internal funds are depleted
and the interests for the investments remain, they use debt to avoid losing an investment
opportunity. Similarly, as soon as internal funds become available, they prefer to cancel the
108 debt before its maturity (Briozzo et al., 2016; Martinez et al., 2017).
Fisher et al. (1989) proposed a dynamic model that includes the recapitalization, which
affects the leverage ratio by the share prices. This model is based on a continuous
line of time and presents solutions to the firms’ capital value considering the dynamics
of the recapitalization. The model is called dynamic TO and assumes that the leverage
ratio is discontinuous and dynamic respect to the cost of break. In this way, the authors
have tried to prove that it is risky to take leverage ratios observed as optimal when there is a
range in which the company is willing to let its ratio oscillate due to the high transaction
costs of recapitalization.
Another modern theory highly recognized is the growth cycle of Berger and Udell (1998),
which affirms that the financial structure of a company changes according to its size and age.
In this way, in the early stages, when companies are young or small, they are less
transparent in terms of financial information, which leads them to finance themselves with
internal sources (their own, family and friends), commercial loans or through business
angels. However, when companies experience other stages of higher growth, they can
access to different external sources: institutions of risk capital, financial markets or
credit banks.
Many authors (López-Gracia and Sogorb-Mira, 2008; Degryse et al., 2012; Aybar-Arias
et al., 2012; Serrasqueiro and Maças Nunes, 2012) have concluded that the TO and PO are
not considered mutually exclusive explanations for financing decisions.
In this line, Titman and Tsyplakov (2007) studied capital structure models and have
argued that companies tend to wait and see if changes in investment possibilities or in the
price of products have the necessary adjustment effect to obtain the best leverage ratio.
Therefore, they have argued that the theories of PO and TO are not mutually exclusive,
since companies select leverage ratios that reflect the benefits of debt financing, as
established by the TO theory, but they can separate such behavior by the reasons
established in the PO theory.
Furthermore, Dewaelheyns et al. (2017) mentioned a set of works (Gaud et al., 2007;
Hovakimian and Li, 2011; Titman and Tsyplakov, 2007) that combine both theories. They
have considered the presence of a TO optimal target leverage to which firms converge over
time and which allows for short-term PO type behavior. These studies argue that
convergence to the target leverage may be slowed down by market imperfections such as
transaction costs and agency costs, which can explain temporary deviations from the target.
Besides, many other contributions appeared during the time, such as the agency theory
(Fama and Miller, 1972; Jensen and Meckling, 1976; Harris and Raviv, 1991), signaling (Ross,
1977), corporate borrowing (Myers, 1977), credit rationing (Stiglitz and Weiss, 1981), the
theory of corporate strategy (Brander and Lewis, 1986; Mishra and Mc Conaughy, 1999;
Barton and Gordon, 1987), market timing (Baker and Wurgler, 2002), the principle of
concordance (Brealey and Myers, 1996), among others, that complete the set of arguments
describing different positions against the capital structure of companies.

3. Methodology: a systematic literature review

The aim of this paper is to provide a bibliometric analysis of the most important research
on firms’ capital structure, focusing on the main theories applied in SMEs, using an
SRL approach.
 The SLR method was originated in the 1990s and it was initially used in the medicine SMEs capital
field. However, it has also been adopted in other areas recently (Cook et al., 1997; Rosenthal, structure
1991; Liu and Liao, 2016; Frizzo-Barker et al., 2016; Bayramusta and Aslihan Nasir, 2016).
This approach provides a modern point of view to review the literature evolution since the
first papers indexed in Scopus database to the present day.
The SRL uses an explicit algorithm, as opposed to a heuristic, to perform a search and
critical appraisal of the literature employing a transparent and reproducible procedure 109
(Tranfield et al., 2003). According to Broadus (1987), a bibliometric study is a quantitative
study of physical published units. Generally, the review process consists of data collection,
data analysis and synthesis. For example, Kumar et al. (2017) applied an SLR related to
capital structure, focusing on the review of capital structure determinants, and have
grouped them into different regions of study, considering a set of characteristics. They have
reviewed 167 studies regarding the Emerald and EBSCO Databases.
The scientific rigueur in conducting each of these steps is paramount for a quality
review. In this research, the three-stage procedure of Tranfield et al. (2003) is followed, which
includes: planning, execution and reporting.
In the first step, the general and specific objectives of the research are detailed. Moreover,
the searching criteria should be established and the database selected (i.e. Web of Science,
Scopus, Emerald, Google Scholar or Redalyc).
Second, in the execution step, the searching and selection of the articles that best adapt to
the investigation’s objectives and hypothesis are performed.
Finally, in the third stage, the synthesis and analysis of the results are presented
according to the objectives.

3.1 Planning and execution

The general objective of the SLR is to know about the literature evolution of firms’ capital
structure, and detect the most important papers and authors that study this issue.
Particularly, we focus the study on the SME capital structure, considering the main
stream theories: the PO and the TO, in order to detect which of them is the most applied for
the SMEs.
A set of works recognized in the literature related to firms’ capital structure is reviewed
in order to detect the most used keywords that identify the topic of study (see Table I).
This knowledge about the state of the art is essential for the selection of keywords to
execute the SLR. In all the reviews, except in Campbell et al. (1997), the word “capital
structure” forms part of the group of keywords or in the “title” of the article, so we select this
keyword to do the searching and study the subject in the database.
The database selected for the analysis is Scopus. The main reason for this selection is its
academic prestige and the allowed access at the University[1] campus. Scopus is one of the
biggest scientific databases with access to 14,000 publications and with a high number of
publications in financial themes. Scopus identifies 14 types of documents and 6 sources.
In this analysis, all the publications are included until the date of the search.

3.2 Execution
In this second step, we identify the initial selection criteria. A group of keywords are
selected, taken as reference the keywords identified in Table I, to know at once the number
of works that study the capital structure in the literature. In this way, we are able to provide
the evolution of the publications and their main characteristics across the time.
Moreover, we focus on the SME’s capital structure literature tendencies and detect the
main theories that justified their financial decisions in order to find out the literature gaps
and support future researches.
JSBED Authors Title Keywords
26,1
Pinegar and Wilbrich What managers think of capital –
(1989) structure theory: a survey
Harris and Raviv (1991) The theory of capital structure –
Campbell et al. (1997) The econometrics of financial markets –
Luigi and Sorin (2009) A review of the capital structure Capital structure, Market timing, Trade-
110 theories off theory, Leverage, Debt, Equity, Agency
costs
Parsons and Titman Empirical capital structure: a review Capital structure, Econometric
(2009) specification, Leverage targets, Finance,
Econometrics, Corporate finance
Miglo (2011) The pecking order, trade-off, signaling Trade-off theory, Pecking order theory,
and market-timing theories of capital Signaling, Market timing
structure: a review
Graham and Leary A review of empirical capital structure Capital structure, Leverage, Trade-off
(2011) research and directions for the future theory, Financial contracting, Partial
adjustment model
Iqbal et al. (2012) A critical review of capital structure Capital structure theories, Capital
theories structure, Trade-off theory, Debt, Equity,
Leverage, Agency cost
Kumar et al. (2017) Research on capital structure Literature review, Leverage, Meta-
determinants: a review and future analysis, Capital structure, Pecking order
Table I. directions
State of the art Note: Own elaboration from Scopus Database

The search was conducted in March 2018, considering the publications until the end of 2017
and by using the keyword “capital structure” in the title, abstract and keywords, according
to the criteria established in Section 3.1. We obtained 3,549 results considering the following
areas: economics, econometrics and finance, business, management and accounting,
social science, decision sciences and engineering, computer science and mathematics.
The publications available since 2018 were excluded (46 documents).

3.3 Reporting
Moreover, with the obtained database, the reports are elaborated in order to show clearly the
information required to study the literature review related to capital structure since the
creation of the database. Characteristics such as the quantity of indexed papers published
per year, type of publications, language, country of publication, citations and the most
relevant journals and authors are collected. Then, an SME analysis based on the main
development of theories in each empirical study is also performed.

4. Firm’s capital structure

Exploring the Scopus database and considering the keyword “capital structure,”
we obtained 3,549 documents distributed from 1959-2017 (see Figure 1). Inside this set,
we investigate regarding the most recognized theories: the PO, the TO and the business
cycle. The search was conducted considering these words through the whole paper. For the
first group, we obtained 976 documents, and for the second one, 873 articles. The business
cycle theory appears as less popular, with 268 documents. Restricting the search to the topic
“title, keywords, or abstract,” the results are listed in the same order (342 for PO; 331 for TO
and 42 for business cycle). This indicates the parity between the PO and TO theory to
explain the capital structure of firms.
 300 SMEs capital
structure
250

200

150 111

100

50

0
Figure 1.
1959
1965
1967
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Capital Structure
papers evolution
Notes: A total of 3,406 documents. Papers in Scopus database until December 2017

As shown in Figure 1, the first paper appearing in Scopus dates from 1959 (the publication
of Schwartz, 1959). The emergence of articles related to firms’ capital structure in recognized
magazines reaches a peak in 1975, increasing over the successive years. During the first
period of analysis, from 1959-1983, there are few publications, with an average of 4.7 papers
per year. From 1984-2005, the average grows to 37.9 documents per year. However, it is
important to highlight the increase of the research topic since the year 2000, more
specifically since 2006. In this last period, the average is 218.5 papers per year. This great
change in the topic research shows the recent interest in the literature for the subject and a
tendency to have more indexed papers during the last years.
In order to determine the publication characteristics of the topic presented, each Scopus
publication is analyzed. Table II presents this classification: 87.2 percent of the papers are
published in journals (3,094 of the 3,549 documents), followed by conference proceedings
(7.0 percent), books (3.7 percent) and books series (1.8 percent). Trade publications have less
than 1 percent. In relation to the source of the publications, 81.5 percent are articles, followed
by conference papers (8.6 percent).
Inside this sample of papers, as shown in Figure 2, 97 percent of them are written in
English followed by Spanish (1 percent), Chinese (0.6 percent), Portuguese (0.4 percent) and
Czech (0.3 percent).
The other languages have almost no relevance (below 0.2 percent). This is an interesting
point to highlight, since this result could be related to different aspects, such as the

Type % Source %

Journals 87.2 Article 81.5

Conference proceedings 7.0 Conference paper 8.6
Books 3.7 Review 4.3
Book Series 1.8 Book chapter 2.8
Trade publications 0.3 Article in press 1.2
Book 0.8
Conference review 0.3 Table II.
Others 0.6 Type of source
Note: Own elaboration from Scopus Database and document
JSBED Portuguese: 0.4% Czech: 0.3% French: 0.2%
26,1 Chinese: 0.6% Iranian: 0.2%
Spanish: 1% Others: 0.3%

112

English: 97.1%
Notes: Own elaboration considering Scopus Database information. Others
Figure 2. include: (Ukrainian, Russian, German, Lithuanian, Bosnian, Croatian,
Main languages
of works Korean, Polish, Hungarian, Japanese, Norwegian, Serbian, Slovenian
and Turkish)

importance of the research theme or area of study in different countries or the predominance
of English published papers dealing with this topic.
Regarding the origin of researches, the USA is the leading country with 32.5 percent of
publications, followed by China (10.1 percent), Great Britain (8.6 percent), Canada (3.9 percent),
Germany (3.8 percent) and Australia (3.7 percent). The rest of the countries have a smaller
participation, nearly to 3.0 percent. The supremacy of the USA can be seen in Figure 3, which
shows the distribution of the researchers across countries. This result is in line with the main
languages of published papers, given that their native language or second language is English.

New Zealand
Indonesia
Belgium
Turkey
South Africa
Singapore
Pakistan
Portugal
Japan
Brazil
Switzerland
Greece
South Korea
The Netherlands
Hong Kong
France
India
Taiwan
Malaysia
Spain
Italy
Australia
Germany
Canada
United Kingdom
China
United States
0% 5% 10% 15% 20% 25% 30% 35%
Figure 3.
Origin of researchers Notes: Own elaboration considering Scopus Database information. This figure includes all
the countries with more than 30 documents
Regarding the main subject areas of study, the papers are concentrated in two main fields: SMEs capital
economics, econometrics finance and business (45.7 percent), and management and accounting structure
(35.7 percent), followed by social science, decision sciences and engineering, computer science,
and mathematics. The distribution between these areas is shown in Figure 4.
Table III presents the first 20 journals in which 36 percent of the 3,094 papers are
published. However, the concentration index of the first four journals ( Journal of Financial
Economics, Journal of Finance, Journal of Banking and Finance, Journal of Corporate 113
Finance) is more than 13 percent. This summary is a useful guide for new researchers to
detect potential journals in which this topic is published.
Table IV presents the evaluation of cites, taking into account the number of citations, the
relative values in each range, the maximum and minimum values of each range and the

Computer Science Mathematics

Decision Sciences 3% 2.1% Multidisciplinary
4% 0%
Engineering
Neuroscience
3.9%
0%
Social Sciences
Economics,
5.6%
Econometrics and
Finance
45.7%

Business,
Management and
Accounting
35.7% Figure 4.
Main areas of study
Note: Own elaboration considering Scopus Database information

Journal First article Cite score 2016 Articles %

Journal of Financial Economics 1974 5.77 116 3.7

Journal of Finance 1996 7.04 111 3.6
Journal of Banking and Finance 1977 2.49 97 3.1
Journal of Corporate Finance 1994 1.93 91 2.9
Corporate Ownership and Control 2003-2016 0.11 60 1.9
Financial Review 2008-2011 1.43 57 1.8
Journal of Financial and Quantitative Analysis 1996 2.86 56 1.8
Managerial Finance 2005 0.12 53 1.7
Review of Financial Studies 1996 4.51 49 1.6
Applied Financial Economics 1996-2014 0.39 41 1.3
Review of Quantitative Finance and Accounting 1991 0.90 38 1.2
International Research Journal of Finance and Economics 2009-2012 – 34 1.1
Applied Economics 1977 0.86 30 1.0
Quarterly Review of Economics and Finance 1992 0.84 28 0.9
Research in International Business and Finance 2004 2.04 28 0.9
International Review of Economics and Finance 1992 1.55 26 0.8
Journal of Financial Research 2003 0.45 26 0.8
Small Business Economics 1989 3.47 26 0.8
Financial Management 1996 1.38 24 0.8
Investment Management and Financial Innovations 2004-2016 0.23 24 0.8
International Journal of Economics and Financial Issues 2011-2016 0.19 23 0.7
Journal of Financial Intermediation 1990 2.89 23 0.7
European Financial Management 1995; 2006-2017 1.51 22 0.7
Management Science 1969 3.62 22 0.7 Table III.
International Journal of Managerial Finance 2005 0.80 20 0.6 The most cited
Note: Own elaboration based on Scopus Database journals
JSBED Cites Articles % Max. Min. Position
26,1
More than 1,000 8 0.2 4,040 1,001 1
750-999 5 0.1 946 774 9
500-749 7 0.2 663 519 14
250-499 36 1.0 485 255 21
100-249 102 2.9 249 100 57
114 50-99 144 4.1 99 50 159
Table IV. 1-49 2,130 60.0 49 1 303
Distribution of ¼0 1,117 31.5 0 2,432
cited papers Note: Own elaboration based on Scopus Database

position by the maximum value of each range. This analysis shows the quality of papers in
terms of cites. Considering the information in Table IV, 68.5 percent of papers have been
published in Scopus database with at least one cite. Only eight documents have more than
1,000 cites. In general, considering the range size, the biggest one is that including between
1 and 49 cites (60 percent). Bearing in mind the Scopus Citation Overview, under these
search rules, 3,549 documents are cited in 47,836 papers in Scopus.
Another way to view the impact of published papers is through the H-index (Hirsch,
2005), which is a cumulative impact measure of the research output. So, the publications are
distributed in ranges of five years and their impact is analyzed. According to Table V, 1,273
papers between 2013 and 2017 have H-index of 21, which means that 21 documents have
been cited at least 21 times. Table V presents the evolution of the H-index across the years.
This shows the validity and impact of the reference models in the subject. The H-index
measure is taken from Scopus Citation Overview.
Moreover, the most cited papers related to the keyword “capital structure” are presented
in Table VI with their references. This list includes many of the pioneer’s models in the
study of capital structure. Besides, they are presented in a chronological order, and the cites
received in the literature are shown. The years since their publication are also considered in
order to contemplate the mean per year received in each case. As can be seen, there are not
positive relations between the year of the publications and the number of cites received.
For example, the most cited papers are one from Merton published in 1973 and another one
of Rajan and Zingales published in 1995, with 22 years of difference between each
publication. Moreover, (Harris and Raviv 1991; Graham and Harvey, 2001), which were
published 10 years apart, have 44 and 45 cites, respectively.
In addition, the authors with more contributions in the area of study are also considered
in this study. Table VII summarizes this information. As can be seen, Graham, Titman and
Serrasqueiro show a high number of cites of their works. In this case, although there are
authors with many works, the degree of the impact is not necessarily higher, considering
cites per paper. Table VII shows the 15 authors who contributed the most to the subject and
their impact measured in terms of cites per paper in the selection.

Range Documents % H-index Cited by

2013-2017 1273 35.9 21 2,466

2012-2008 1104 31.1 56 8,856
2007-2003 523 14.8 83 15,149
o2003 649 18.2 109 21,365
Table V. Total 3,549 47,836
H-index Note: Own elaboration based on Scopus Database
 Year of Years since Cites
SMEs capital
Author public. Tittle Journal Cites publication per year structure
Merton 1973 Theory of rational option The Bell Journal of 4,040 44 92
pricing. Economics and
Management Science
Diamond 1984 Financial intermediation and Review of Economic 2,351 37 63
delegated monitoring Studies 115
Myers 1984 The capital structure puzzle The Journal of Finance 1,948 33 59
Rajan and 1995 What do we know about The Journal of Finance 1,803 22 81
Zingales capital structure? Some
evidence from international
data
Titman and 1988 The determinants of capital The Journal of Finance 1606 29 55
Wessels structure choice
Graham and 2001 The theory and practice of Journal of Financial 1481 33 45
Harvey corporate finance: evidence Economics
from the field
Harris and 1991 The theory of capital The Journal of Finance 1162 26 44
Raviv structure
Stulz 1988 Managerial control of voting Journal of Financial 1001 33 30
rights: financing policies and Economics
the market for corporate
control
Berger and 1998 The economics of small Journal of Banking 946 29 32
Udell business finance: the roles of and Finance
private equity and debt
markets in the financial
growth cycle
De Angelo, and 1980 Optimal capital structure Journal of Financial 871 19 45
Masulis under corporate and Economics
personal taxation
Leland 1994 Corporate debt value, bond The Journal of Finance 824 23 35
covenants, and optimal
capital structure
Baker and 2002 Market timing and capital The Journal of Finance 784 16 49
Wurgler structure
Bradley et al. 1984 On the existence of an The Journal of Finance 774 16 48
optimal capital structure:
theory and evidence
Booth et al. 2001 Capital structures in Journal of Finance 663 15 44 Table VI.
developing countries The most cited papers
Note: Own elaboration based on Scopus Database on capital structure

5. SMEs’ capital structure

Traditionally, SMEs present more limited access to external finance than large firms do.
The smallest ones imply high risk related to their activities and are associated with different
problems of information asymmetry. Problems of asymmetric information, such as adverse
selection and moral risk, can severely affect access to external financing. Thus, this
constitutes one of the main research lines that can promote the development and survival of
SMEs, especially in emerging countries where financial constraints are stronger.
SMEs, compared to big companies, are characterized qualitatively as organizations in
which there is little difference between ownership and management. They have low
professionalization of their management structure and with an interweaving of economic
and personal interests between the company and the manager-owner. SMEs also have a
JSBED Author Papers Cites Cites per paper
26,1
Graham, J. 16 2,072 129
Titman, S. 15 1,338 89
Serrasqueiro, Z. 14 49 3
De Jong, A. 11 414 38
Zechner, J. 11 204 18
116 Morellec, E. 10 393 39
Yazdanfar, D. 9 4 0
Lee, C.F. 9 73 8
Maças Nunes, P. 9 42 5
Dang, V.A. 8 72 9
Hull, R.M. 8 32 4
Nishihara, M. 8 28 3
Overesch, M. 8 69 9
Table VII. Abor, J. 7 91 13
The most Al-Najjar, B. 7 44 6
recognized authors Note: Own elaboration based on Scopus Database

shortage of financial and technical resources, but their main advantage is the great
flexibility and adaptability to changes in the macroeconomic context (Ang, 1991).
Given the importance of the SMEs in the economies, and considering their contribution to
the GDP and the employment rates, many works concentrate their efforts to detect the most
relevant theories respect to financial access. So, in order to complete our specific research
objective, another research pattern is included, restricting the searching to SMEs.
The theories of SME capital structure are classified in order to detect the way of financing
and the factors that influence financial decisions.
Exploring the filtered Scopus database to detect papers referring to small firms, the
keywords “SMEs,” “small firms” and “small business” are considered in the categories
“title,” “keywords” and “abstract.” Through this search, 196 documents are detected,
excluding 3 documents published in 2018. We focus on the discussion of SME capital
structure that is an important subject for SMEs, given that, generally, they are restricted to
the access of capital markets and to some other external funds. Figure 5 presents the
temporal evolution of the SME’s research in the subject.

30

25

20

15

10

Figure 5.
0
The evolution of
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

SME capital
structure theories
Note: Own elaboration considering Scopus Database information
As shown in Figure 5, during the first period from 1985-2002, there are few publications per SMEs capital
year, and then, they increase gradually to the last decade with an average of 14.6 documents structure
per year. This result highlights the importance of the research theme during the last years
and the increased interest in these specific issues (80 percent of these papers were published
in the last ten years).
In terms of the origin of the researches, the USA also leads this classification with
17.3 percent, followed by the UK with 15.3 percent. The other researchers’ origins are shown 117
in Figure 6. The rest of the countries have a smaller participation, below 3 percent.
Moreover, 97.4 percent of the documents are written in English, followed by Spanish with
2.6 percent. The other languages have participation smaller than 5 percent.
According to the analysis of the sample, 85.7 percent of the documents are articles, and
97.4 percent of them are published in journals. Some of the journals with more contributions
also change their order. Table VIII shows the 15 most relevant journals that concentrate
78 papers of the 181 published in journals (43.1 percent).

Others: 8.2%
The Netherlands: 3.1%
Malaysia: United States:
3.6% 17.3%

Sweden: 4.1%
Ireland: 4.6%
United
Greece: 4.6% Kingdom:
15.3%
France: 4.6%

Italy: 6.1% Portugal:

7.7%
Spain: 6.6% Australia: Figure 6.
China: 7.1% 7.1% Origin of the
publications
Note: Own elaboration considering Scopus Database information

Journal Documents %

Small Business Economics 19 10.5

Journal of Small Business and Enterprise Development 7 3.9
Journal of Financial Economics 6 3.3
Research in International Business and Finance 6 3.3
Applied Financial Economics 5 2.8
Journal of Banking and Finance 5 2.8
Managerial Finance 5 2.8
Journal of Risk Finance 4 2.2
Applied Economics 3 1.7
Corporate Ownership and Control 3 1.7
Financial Management 3 1.7
International Journal of Business and Globalization 3 1.7
International Small Business Journal 3 1.7
Journal of Corporate Finance 3 1.7 Table VIII.
Journal of Small Business Management 3 1.7 The most popular
Notes: This table considers a total of 181 articles published in journals. Papers in Scopus database until journals in SME
December 2017 capital structure
JSBED In order to analyze the main characteristics of the SME capital structure publications, we
26,1 examine a list of the 196 documents, considering the type of work (theoretical or empirical),
and the countries of analysis (emerging or developed).
According to this segmentation, we find that 57 percent of the publications are focused
on developed countries and 94.4 percent of the papers are empirical studies.
This analysis is useful to detect the gaps in the literature characterized for the lack of
118 databases of emerging countries and the theoretical developments to improve the
performance of the traditional capital structure theories. Furthermore, only 4.6 percent of
papers study the SME capital structure simultaneously: emerging and developed countries.
This denotes the lack of an integral database with homogenous data for the two groups.
Moreover, in order to obtain a more thorough study of SME capital structures related to
the most recognized theories in the literature, a filter of “Pecking Order,” “Trade- Off” and
“Business Cycle” is applied to this data set of 196 articles and articles in press. As a result,
100 articles are obtained. Although the search criteria has been restricted, we do not limit the
search to the “title,” “abstract” and “keywords,” and, consequently, many works of the list
do not discuss specifically our theme of study. We review the first 40 articles of this list.
The papers excluded from the analysis are listed in Appendix.
Considering the filtered list, we analyze some characteristics of the 23 latest papers
published in Scopus.
Table IX shows the works that prove empirically SME capital structure theories, in order
to investigate which of these theories is more appropriate to explain SME capital structure.
The results could be distributed in four groups, considering the empirical results: works that
prove the PO theory, others in favor of the TO theory, others that consider both theories
complementary and other works that are not conclusive. We present the last 23 papers
selected. As shown, all of them are empirical works which study SME capital structure in
European countries (82.6 percent of the papers), especially with applications to Portugal
(30.4 percent) and Swedish, Greece and Italia (13 percent for each country). Also, there
are empirical works for Vietnam, India, Turkey, Australia, New Zealand and Austria.
The period of analysis in almost all publications is concentrated from 2005-2011, in view of
the effect of the last financial crisis.
Regarding the applied methodology, the panel data models are the most common, followed
by the OLS models, GMM models and other multivariate test/models (see Table IX).
Bearing in mind the main conclusions of the articles presented, the PO theory seems to
be more appropriate to SME capital structure, but there are many applications that point
out that PO and TO theories are not mutually exclusive to explain SME capital structure.
Only two papers support the TO theory to explain the financial behavior of SMEs and
two others support another theory. The general overview of the presented conclusions
is consistent with the main problems that this kind of firms face to access external
financial sources.

6. Conclusions
This paper presents an overview of SME capital structure using an SLR. We show ordered
information about the main publications of firm’s capital structure using Scopus database.
We consider the evolution of the topic across the years, the most cited papers, the most
recognized authors and the most popular journals that concentrate papers related to this
research. Moreover, we complete this analysis by filtering the database to study specifically
SMEs’ capital structure in the same line. In addition, we delve into the database, considering
the discussion among the traditional capital structure theories.
The results show the general characteristics of the publications in terms of the literature
growth and the most popular authors in this topic. These concerns are similar among the
literature related to the whole sample of firms and the set of SMEs’ papers.
Authors Keywords Data Variables and methodology Main theory

Trinh et al. (2017) Capital structure, Financial Data: Vietnamese SMEs, from 2003- Variables Results in favor of pecking order
leverage, Investment financing, 2009 Dependent variables: new theory
Pecking order theory, SMEs, Data set: the surveys were investment and funds
Vietnam conducted by the Central Institute Independent variables: external
for Economic Management (CIEM), finance, internal finance, retained
the Institute of Labor Science and earnings, other internal finance,
Social Affairs (ILSSA), Invalids and investment, financial leverage, size,
Social Affairs (MOLISA), and the revenue growth, profitability,
Department of Economics of the physical asset ratio and ownership
University of Copenhagen, together Methodology: Heckman two-step
with the Royal Embassy of estimation
Denmark in Vietnam
McNamara et al. SMEs, Capital structure, Lending Data: European SMEs, period from Variables The results are in accordance with
(2017) infrastructure 2005-2011 Dependent variables: total debt the pecking order, trade-off and
Data set: data obtained from the ratio, long-term debt ratio and agency theories of capital structure
Amadeus database short-term debt ratio
Independent variables: credit index,
private property, procedures to
enforce a contract recovery rate,
trust capital regulatory index,
effective tax rate, cost to enforce a
contract, time to enforce a contract,
cost to recover a debt, time to
recover a debt, age, tangibility,
profitability, log assets, employees,
annual growth, deposits per GDP,
ten-year gov, bond, inflation and
bank concentration
Methodology: baseline estimation
with fixed effects and sample splits
Sardo and Dynamic panel data models, Data: based on two samples of Variables Results in favor of trade-off theory
Serrasqueiro Dynamic trade-off theory, Medium- Portuguese firms. ,1377 small-sized Dependent variables: adjustment of
(2017) sized firms, small-sized firms firms and 811 medium-sized firms, short-term debt and long-term debt

(continued )
structure

119
SMEs capital

The latest 23 papers

related to SME
Scopus database
published in the
Table IX.

capital structure

Table IX.
Authors Keywords
Banga and SMEs, Capital structure, Long-term Data: 64 Indian SMEs. The period
Gupta (2017) debt, Short-term debt, Panel data
regression, Pecking order theory,
Trade-off theory, Agency theory,
Profitability, Operating risk, Size,
Growth opportunities, Asset
structure
Pacheco and Capital structure, Hospitality
Tavares (2017) industry, Panel data estimation,
Pecking order theory, SMEs, Trade-
off theory
Öhman and Capital structure, SMEs, Debt
Yazdanfar (2017) policy.
Data
for the period 2007-2011
Data set: Amadeus database
analyzed is from 2007-2012
Data set: CRISIL SME Rating
Data: 43 Portuguese SMEs
The period of analysis is between
2004 and 2013
Data set: SABI database
Data: 15,897 Swedish SMEs. The
period of analysis is between 2009
and 2012
Data set: Affärsdata
26,1
120
JSBED
Variables and methodology Main theory
toward the respective target debt
ratios
Independent variables: profitability,
asset structure, age, growth, size,
non-debt tax shields and risk
Methodology: dynamic panel data
Variables Results suggest predictions of
Dependent variables: total debt Pecking Order theory to be useful in
ratio, long-term debt ratio and explaining the capital structure
short-term debt ratio decisions of Indian SMEs for short-
Independent variables: profitability, term debt only and support the
growth opportunities, size, asset applicability of Trade-Off theory
structure and operating risk implying that greater the operating
Methodology: panel data regression risk faced by a firm, more inclined it
is in reducing its leverage
Variables Results argue that theories are
Dependent variables: total complementary
indebtedness, long-term
indebtedness and short-term
indebtedness
Independent variables: return on
assets, return on equity, assets
tangibility, turnover growth, assets
growth, size, total liquidity, other
tax benefits besides debt, age,
solvency ratio and structure ratio
Methodology: panel data regression
Variables The results do not link the theories
Dependent variables: short-term presented with the results obtained
debt and long-term debt
Independent variables: size, age,
growth, profitability, liquidity, asset
tangibility, non-debt tax shields and
(continued )
Authors Keywords
Maças Nunes Hotel small and medium
and Serrasqueiro enterprises, Long-term debt,
(2017) Pecking order theory, Short-term
debt, Trade-off theory
Pacheco (2016) Capital structure, Small- to medium- Data: 3164 Portuguese firms and
sized enterprises,
Internationalization, Upstream-
downstream hypothesis, Agency
costs of debt, Portugal
Table IX.
Data
Data: 177 Portuguese SMEs hotels Variables
for the period 2004-2012
Data set: gathered from the social debt and long-term debt ratio
and behavioral instruments
database, supplied by Bureau van size, assets tangibility, growth,
Dijk
the period from 2011-2014
Data set: SABI
Variables and methodology Main theory
industry affiliation
Methodology: OLS and fixed-effects
models
Results in favor of pecking order
Dependent variables: short-term theory
Independent variables: profitability,
percentage of growth of sales, non-
debt tax shields, ratio of
depreciations to total assets,
effective tax rate risk, variations of
short-term debt, variations of long-
term debt, cash flow refers to
operational, ratio between earnings
before interest and taxes plus
depreciations to total assets,
logarithm of number of years the
firm has been in existence, high
growth-low cash flow and a dummy
variable for growth
Methodology: GMM Generalized
Method of Moments
Variables: Results in favor of Pecking Order
Dependent variables: total debt, theory
short-term and long-term debt
Independent variables: exports
respect to total sales; presence in
markets outside EU, presence in EU
market, return on assets, assets
tangibility, size, depreciation over
total assets, solvency and structure
ratio
(continued )
structure
121
SMEs capital
 26,1

122
JSBED

Table IX.
Authors Keywords Data Variables and methodology Main theory

Methodology: panel data with fixed

effects
Balios et al. Corporate finance, Financial Data: Greek SMEs. Period of Variables They conclude that Greek SMEs
(2016) leverage, Capital structure, Greek analysis from 2009-2012 Dependent variables: debt ratio prefer to finance their investments
firms Data set: ICAP database Independent variables: asset internally rather than externally,
structure, size, growth rate, being in accordance with the
profitability and risk pecking order theory
Methodology: panel data
Serrasqueiro High-tech SMEs, Non-high-tech Data: Portuguese SMEs for the Variables and measures used in the High-tech SMEs are closer to the
et al. (2016) SMEs, Panel data models, Pecking period 2000-2009 pecking order theory tests: debt assumptions of the pecking order
order theory, Trade-off theory Data set: SABI database variations, financial deficit, growth theory, and non-high-tech SMEs are
of total assets, retained earnings, closer to the predictions of the trade-
equity issues and debt variations off theory
Variables and measures used in the
trade-off theory test: debt
profitability, growth opportunities,
age, size, assets tangibility, non-
debt tax shields, effective tax and
risk
Methodology: OLS regression
Yazdanfar and Capital structure, SMEs, Debt Data: 15,952 Swedish SMEs, Variables The results support the pecking
Öhman (2016) financing, Life cycle stages between 2009 and 2012 Dependent variables: short-term order theory
Data set: Affärsdata database debt, long-term debt, total debt and
equity capital
Independent variables: age, size and
sector
Methodology: ANOVA and
Multivariate regression
Dasilas and Corporate governance, Credit Data: 231 Greek SMEs and large Variables Not conclusive results
Papasyriopoulos ratings, Capital structure, SMEs, firms for the 2005-2010 period Dependent variables: total debt;
(2015) ASE (Athens Stock Exchange) Data set: Athens Stock Exchange short- term debt and long-term debt
and Amadeus database for SMEs Independent variables: age, size,
fixed tangible assets, growth, credit

(continued )
Authors Keywords Data Variables and methodology Main theory

ranking, profitability, ratio of

annual depreciation to total assets,
board members, the proportion of
outside and independent members
in the board and two dummies for
crisis or pre-crisis period and
audited firms
Methodology: panel data with fixed
effects
Uyar and Capital structure, SME, Turkey, Data are generated through a Variables The results support the pecking
Guzelyurt (2015) Trade-off, Pecking order questionnaire survey to 138 Dependent variables: long-term order theory
Turkish SMEs, during July 2011 debt and short-term debt
Independent variables: size, age and
other characteristics of SMEs
Methodology: Kruskal-Wallis test
and Multiple regression analysis
Burgstaller and Capital structure, Family firms, Data: 470 Austrian SMEs from Variables: They are not clear. Some results
Wagner (2015) Founder management 2005-2010 Dependent variable: debt ratio. point toward the pecking order
Data set: Amadeus database Independent variables: firm age, theory being more explanatory, but
firm size, tangible assets, the cash because of the nature and
return on assets, the growth rate of characteristics of family firms, they
total assets, the ratio of working indicate that the capital structure is
capital, risk, descendant-controlled difficult to describe by the
family firms, the EBITDA and the traditional financing theories
interest coverage
Methodology: Tobit fixed effects
model
Yazdanfar and Profitability, SMEs, Capital Data: 15,897 Swedish during 2009- Variables Results support pecking order
Öhman (2015) structure, Firms Sweden, Debt 2012 Dependent variable: profit theory to explain the SME capital
policy Data set: data from Affars database Independent variables: accounts structure
payable, short-term debt, long-term
debt, size, age and sector
Methodology: two-stage least

(continued )
structure

123
SMEs capital

Table IX.
 26,1

124
JSBED

Table IX.
Authors Keywords Data Variables and methodology Main theory

squares regression and Multivariate

seemingly unrelated regression
(SUR) estimation (3SLS)
Serrasqueiro and Beira interior, Capital structure, Data: 53 SMEs of the Beira region in Variables Results argue that theories are
Caetano (2015) Pecking order theory, SMEs, Trade- Portugal between 1998 and 2005 Dependent variable: debt complementary
off theory, Financing support Data set: SABI database Independent variable: effective tax
rate, non-debt tax shields, tangible
assets, size, age and risk
Methodology: GMM system and
least squares dummy variable
corrected dynamic estimator
Rossi et al. (2015) Capital structure, Firm behavior, Data: 82 Italian firms from 2007- Variables The results support trade-off theory
Pecking order theory, Trade-off 2011 period Dependent variable: total debt, long- to explain the financial behavior of
theory, Agro-food industry, SMEs, Data set: AIDA database term debt, short-term debt SMEs
Financial choices Independent variables: real tax rate,
non-debt tax shields, growth
opportunities, tangible assets, size
and profitability
Methodology: panel data model
Xiang and Financing decisions, Small and Data: 2,732 Australian SMEs from Variables Results support the Pecking Order
Worthington medium-sized enterprises, Capital 2005-2006 Dependent variables: debt and theory as more useful to explain
(2015) structure, debt and equity Data set: surveys of the Business equity, debt alone, and equity alone. SME financial behavior. Also, they
Longitudinal Database (BLD) Independent variables: the focus of present some evidence supporting
Expended CURF, conducted by the the business (with the following agency cost theory on the grounds
Australian Bureau of Statistics alternatives: financial measures, of the positive effects of family
cost measures, operational ownership on debt seeking
measures, quality measures,
innovation measures and human
resources), the existence of written
strategic and business plans,
growth, family ownership, degree of
foreign ownership, profitability
compare with the competitors,

(continued )
Authors Keywords Data Variables and methodology Main theory

increase of profitability. The control

variables are sales, size, firm’s age,
exports, imports and financial
assistance from government
organizations
Methodology: panel data, logistic
regression analysis and Wald test
Wellalage and New Zealand, Insider ownership, Data: 120 New Zealand unlisted Variables Not conclusive results
Locke (2015) Leverage, Small business small businesses, covering the Dependent variables: debt
period 1998-2008 Independent variables: firm size,
Data set: the data are collected ownership percentage, growth, risk,
annually in conjunction with the profitable, tangibility assets and
New Zealand Institute of Chartered sector
Accountants Methodology: dynamic panel
(GMM)
Daskalakis et al. Capital structure, Small firms, Small Data: 1,018 Greek SMEs over the Variables Results in favor of pecking order
(2014) enterprises, Small and medium period 2003-2007 Dependent variable: debt ratio theory
firms, Micro Data set: Hellastat database Independent variables: asset
structure, size, profit and growth
Methodology: panel data analysis,
two-stage model ( first, a Pooled
Estimated Generalized Least
Squares (EGLS) using cross-section
weights and then F-test)
Serrasqueiro and Hotel sector, Panel data models, Data: 177 SMEs in the hotel sector Variables Results conclude that pecking order
Maças Nunes Pecking order theory, SMEs, trade- in Portugal between 2000 and 2009 Dependent variable: debt variations theory does not totally explain the
(2014) off theory Data set: SABI database Independent variable: financial capital structure decisions. The
deficit, growth of assets, retained trade-off theory has also
earnings, equity issues, considerable importance to explain
profitability, size, tangible assets, the phenomenon. They consider
growth opportunities, non-debt tax that both theories are not mutually
shields, effective tax rate and risk exclusive

(continued )
structure

125
SMEs capital

Table IX.
 26,1

126
JSBED

Table IX.
Authors Keywords Data Variables and methodology Main theory

Methodology: GMM system and

LSDVC
Gottardo and Control, Capital structure, Private Data: 3,006 Italian unlisted non- Variables The results do not link the theories
Moisello (2014) family firms financial firms between 2001 and Dependent variable: book leverage presented with the results obtained
2010 of family and non-family medium-
Data set: AIDA database large firms and family and non-
family small firms
Independent variables: profitability,
logarithm of sales, firm’s market
share, cash flow, depreciation,
tangibility, total assets, net working
capital, liquidity, inventory, capital
turnover, family ownership,
management ownership and a
dummy variable for foreign owned
firms
Methodology: a cross-sectional
analysis and panel data analysis
Rossi (2014) Capital structure, Pecking order Data: 764 non-financial Italian Variables The results show that the financing
theory, POT, Trade-off theory, SMEs for the period 2007-2011 Dependent variables: total debt decisions in these firms could be
TOT, Small and medium enterprise, Data set: AIDA database ratio, short-term debt ratio and explained by the main capital
SME, Corporate finance long-term debt ratio structure theories: pecking order
Independent variables: effective tax theory, trade-off theory and Fiscal
rate, non-debt tax shields, theory
intangible assets, tangible assets,
size and profitability
Methodology: panel data with fixed
effects
This study allows us to overview the general subject, and guides the researchers to find SMEs capital
recognized bibliography and journals to publish their work. structure
In addition, in order to detect the SME literature gaps, we identify the characteristics of
the publications, detecting that most papers are empirical, and apply similar econometric
techniques to compare results and test the main traditional theories between countries that
belong to the same set of developed countries. This result allows us to state that there are
few works that analyze the SME’s capital structure in emerging countries, and there are also 127
scarce theoretical works that intend to improve the capital structure theories.
Furthermore, we detect that there are no applications of parametric and non-parametric
techniques such as neural networks, cluster analysis, genetic algorithms and expert
systems, among others, that could model the behavior of SMEs and their financial decisions
under their actual financial alternatives.
Although this paper has provided a systematic review and a bibliometric overview of the
firm’s capital structure, there are some limitations that should be noted. This paper has the
aim to analyze all the publications of capital structure included in the Scopus database, in
order to detect according to the latest publications, gaps in the theory and future research
lines. So, as future research lines, in order to continue this work, we suggest examining other
recognized databases to contrast the most popular theories, authors and works related to
capital structure. Moreover, a set of synonymous keywords of capital structure should be
considered, and other theories should be included in order to test their relevance.

Note
1. This database is available to professors and researches of the Universidad Nacional del Sur,
through the Science and Technology Electronic Database of the Ministerio de Ciencia Tecnología e
Innovación Productiva.

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Further reading
Newman, A., Borgia, D. and Deng, Z. (2013), “How do SMEs with single and multiple owners finance
their operations differently? Empirical evidence from China”, Thunderbird International
Business Review, Vol. 55 No. 5, pp. 531-544.

Appendix. List of papers excluded from Table IX that complete the first 40 articles by
the 100 papers obtained from the filtered criteria established. *These papers could not
be revised, given the access was not allowed
*Koralun-Bereźnicka, J. (2017), “Firm size and debt maturity as indirect determinants of capital
structure: evidence form European panel data”, Applied Economics Letters, pp. 1-4.
Munir, Q., Kok, S.C., Teplova, T. and Li, T. (2017), “Powerful CEOs, debt financing, and leasing in
Chinese SMEs: evidence from threshold model”, North American Journal of Economics and Finance,
Vol. 42, pp. 487-503.
Daskalakis, N., Balios, D. and Dalla, V. (2017), “The behaviour of SMEs’ capital structure
determinants in different macroeconomic states”, Journal of Corporate Finance, Vol. 46, pp. 248-260.
Ferrando, A., Popov, A. and Udell, G.F. (2017), “Sovereign stress and SMEs’ access to finance:
Evidence from the ECB’s SAFE survey”, Journal of Banking and Finance, Vol. 81, pp. 65-80.
Hogan, T., Hutson, E. and Drnevich, P. (2017), “Drivers of external equity funding in small high-tech
ventures”, Small Business Management, Vol. 22 No. 2, pp. 236-253.
*Kolandaisamy, I., Marimuthu, M., Maran, K., Sulasi, S. and Fahmida (2017) “Small businesses and
effect of capital structure: a conceptual review”, International Journal of Economic Research, Vol. 14
No. 19, pp. 365-370.
He, S. and Ausloos, M. (2017), “The impact of the global crisis on SME internal vs external financing
in China”, Banking and Finance Review, Vol. 9 No. 1, pp. 1-18.
Shah, A., Khan, Z. (2016), “Importance of judicial efficiency in capital structure decisions of small
firms: evidence from Pakistan”, Pakistan Development Review, Vol. 55 No. 4, pp. 361-394.
JSBED Hernández-Cánovas, G., Mínguez-Vera, A., Sánchez-Vidal, J. (2016),“Ownership structure and debt
26,1 as corporate governance mechanisms: an empirical analysis for Spanish SMEs”, Journal of Business
Economics and Management, Vol. 17 No. 6, pp. 960-976.
*Haro-de-Rosario, A., Caba-Pérez, M.C. and Cazorla-Papis, L. (2016), “The impact of venture capital
on investee companies: evidence from Spain”, Review of Managerial Science, Vol. 10 No. 3, pp. 577-600.
Chai, Q., Vortelinos, D. and Zhao, H. (2016), “Do firms’ leverage deviations affect overconfident
CEOs’ acquisition decisions?, Corporate Ownership and Control, Vol. 13 No. 3, pp. 111-120.
132 *Gupta, J., Gregoriou, A. and Healy, J. (2015), “Forecasting bankruptcy for SMEs using hazard
function: to what extent does size matter?”, Review of Quantitative Finance and Accounting, Vol. 45
No. 4, pp. 845-869.
*Uyar, A. and Guzelyurt, M.K. (2015), “Impact of firm characteristics on capital structure choice of
Turkish SMEs”, Managerial Finance, Vol. 41 No. 3, pp. 286-300.
Yazdanfar, D., Öhman, P. (2015), “Firm-level determinants of job creation by SMEs: Swedish
empirical evidence”, Journal of Small Business and Enterprise Development, Vol. 22, No. 4 pp. 666-679.
Seppa, R. (2014), “Implication of inside-debt: signaling for bankruptcy probabilities within small
firms”, Baltic Journal of Management, Vol. 9 No. 2, pp. 168-188.
García-Posada, M. and Mora-Sanguinetti, J.S. (2014), “Are there alternatives to bankruptcy? A study
of small business distress in Spain, SERIEs, Vol. 5 Nos 2-3, pp. 287-332.
Kaličanin, D. and Todorović, M. (2014), “Interactions between business and financial strategies in
Serbian companies, Economic Annals, Vol. 59 No. 203, pp. 55-74.

Corresponding author
Lisana B. Martinez can be contacted at: lbmartinez@iiess-conicet.gob.ar

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