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The capital structure choices of agro-food firms: evidence from Italian SMEs

Author

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  • Matteo Rossi
  • Rosa Lombardi
  • Fabio Nappo
  • Raffaele Trequattrini

Abstract

The theme of capital structure has always been of great interest in the debate between scholars in the business research field. The aim of this paper is to test the application of the different financing theories in explaining the capital structure choice of 82 Small and Medium Enterprises (SMEs) within the Italian agro-food industry. The results show that the financing decisions in these firms could be explained through the main capital structure theories: Pecking Order Theory (POT), Trade-off Theory and Fiscal Theory. In agreement with POT, our results confirm an approach comprising an initial check on availability of internal resources, followed by the use of external capital (particularly bank debt). The research questions of this paper are the following: How do companies finance themselves? What are the mains factors that influence a firm's financing decisions?

Suggested Citation

  • Matteo Rossi & Rosa Lombardi & Fabio Nappo & Raffaele Trequattrini, 2015. "The capital structure choices of agro-food firms: evidence from Italian SMEs," International Journal of Management Practice, Inderscience Enterprises Ltd, vol. 8(3), pages 172-186.
    • Handle: RePEc:ids:ijmpra:v:8:y:2015:i:3:p:172-186
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    Citations

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    Cited by:

    1. Iotti, Mattia, 2023. "Financial evaluation and credit access of agricultural firms," Economia agro-alimentare / Food Economy, Italian Society of Agri-food Economics/Società Italiana di Economia Agro-Alimentare (SIEA), vol. 25(2), October.
    2. Enjolras, G. & Sanfilippo, G., 2018. "The role of debt in financing French farm investments," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277006, International Association of Agricultural Economists.
    3. Áron Szennay & Cecília Szigeti & Judit Beke & László Radácsi, 2021. "Ecological Footprint as an Indicator of Corporate Environmental Performance—Empirical Evidence from Hungarian SMEs," Sustainability, MDPI, vol. 13(2), pages 1-17, January.
    4. Samal Kokeyeva & Petr Hajek & Ainagul Adambekova, 2022. "Small Firms’ Capital Structure and Performance," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 128-144.
    5. M. Belén Guercio & Lisana B. Martinez & Aurelio F. Bariviera, 2019. "SME Steeplechase: When Obtaining Money Is Harder Than Innovating," IJFS, MDPI, vol. 7(2), pages 1-14, May.
    6. Elisa Giacosa & Alberto Mazzoleni, 2016. "A decision model for the suitable financing for small and medium enterprises," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 8(1), pages 39-74.
    7. Lina Maria. Maya Toro & Manuela. Gallon Bedoya, 2018. "Impact of Private Equity in Colombian Companies: A Case Study," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 4, September.
    8. Mattia Iotti & Giuseppe Bonazzi, 2023. "Financial Sustainability in Agri-Food Companies: The Case of Members of the PDO Parma Ham Consortium," Sustainability, MDPI, vol. 15(5), pages 1-31, February.
    9. Jaworski, Jacek & Czerwonka, Leszek & Mądra-Sawicka, Magdalena, 2019. "Determinants of Capital Structure: Evidence from Polish Food Manufacturing Industry," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(1), March.

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