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How Theory Meets Practice: An Analysis of the Capital Structure of Spanish SMEs

Author

Listed:
  • Clara Cardone Riportella

    (Carlos III University, Spain)

  • Leonardo Cazorla Papis

    (Universidad de AlmerÃa, Spain)

Abstract

The article analyzes the factors determining the capital structure of the Spanish small and medium enterprises [SMEs]. The analysis is grounded on the agency theory, the signalling approach and the pecking order theory. In particular, the article provides a qualitative and quantitative analysis about the impact of company brand, the ownership and control structure, and the relationship between the SMEs and their own financial policy. This analysis is based on defining the expected relationships that one might consider between the referred variables and the total debt ratio. In this regard, the analysis will be conducted by means of considering a survey of 410 Spanish SMEs where an ANOVA test will be applied. Then, a hierarchical regression model will allow comparison of the hypotheses made.

Suggested Citation

  • Clara Cardone Riportella & Leonardo Cazorla Papis, 2006. "How Theory Meets Practice: An Analysis of the Capital Structure of Spanish SMEs," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 11(2), pages 73-94, Summer.
    • Handle: RePEc:pep:journl:v:11:y:2006:i:2:p:73-94
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    References listed on IDEAS

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    More about this item

    Keywords

    Capital Structure; Small Business; SME; Spain;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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