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Determinants of the capital structure of small and medium enterprises: Empirical evidence in the public works and hydraulics sector from Algeria

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This study aims to identify the determinants of the capital structure of SMEs in Algeria during the period 2010-2018. Where a sample consists of 20 SMEs from the Public Works and Hydraulics sector. The study used financial leverage as the dependent variable and assets structure, profitability, liquidity, and size as independent variables. The study used Panel Data methods for testing the hypothesis. The results show that profitability, liquidity, and assets structure are negatively related to financial leverage, while size does not affect the financial leverage. The results indicate that SMEs in Algeria rely on their internal resources to finance their activities.

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  • Hacini, Ishaq & Mohammedi, Khadra & Dahou, Khadra, 2022. "Determinants of the capital structure of small and medium enterprises: Empirical evidence in the public works and hydraulics sector from Algeria," Small Business International Review, Asociación Española de Contabilidad y Administración de Empresas - AECA, vol. 6(1), pages 408-408, February.
    • Handle: RePEc:aaz:sbir01:v:6:y:2022:i:1:p:e408
    DOI: 10.26784/sbir.v6i1.408
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    1. San Martín, Pablo & Saona, Paolo, 2017. "Capital structure in the Chilean corporate sector: Revisiting the stylized facts," Research in International Business and Finance, Elsevier, vol. 40(C), pages 163-174.
    2. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    3. Myers, Stewart C, 1984. "The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-592, July.
    4. Myers, Stewart C., 1984. "Capital structure puzzle," Working papers 1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    5. Mateev, Miroslav & Poutziouris, Panikkos & Ivanov, Konstantin, 2013. "On the determinants of SME capital structure in Central and Eastern Europe: A dynamic panel analysis," Research in International Business and Finance, Elsevier, vol. 27(1), pages 28-51.
    6. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    7. Stewart C. Myers, 1984. "Capital Structure Puzzle," NBER Working Papers 1393, National Bureau of Economic Research, Inc.
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    1. Rodríguez-Valencia, Leslie & Lamothe Fernández, Prosper, 2023. "Managerial concentration, ownership concentration, and firm value: Evidence from Spanish SMEs," Small Business International Review, Asociación Española de Contabilidad y Administración de Empresas - AECA, vol. 7(1), pages 541-541, March.

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    More about this item

    Keywords

    capital structure; small and medium enterprises; financial leverage; Algeria;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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