IDEAS home Printed from https://ideas.repec.org/p/ivi/wpasec/2002-18.html
   My bibliography  Save this paper

How Sme Uniqueness Affects Capital Structure: Evidence From A 1994-1998 Spanish Data Panel

Author

Listed:
  • Francisco Sogorb- Mira

    (Universidad CEU Cardenal Herrera)

Abstract

The principal aim of this paper is to test how firm characteristics affect Small and Medium Enterprise (SME) capital structure. We carry out an empirical analysis over a panel data of 6482 non?financial Spanish SMEs along the five-year period 1994?1998, modelling the leverage ratio as a function of firm specific attributes hypothesized by capital structure theory. Our results suggest that non?debt tax shields and profitability are both negatively related to SME leverage, while size, growth options and asset structure influence positively on SME capital structure; they also confirm a maturity matching behaviour in this firm group. El principal objetivo de este trabajo reside en estudiar cómo determinadascaracterísticas empresariales afectan a la estructura de capital de la Pequeña y MedianaEmpresa (PYME). Para lograr este objetivo, se lleva a cabo un análisis empírico sobre unpanel de 6482 PYMEs no financieras españolas a lo largo del lustro 1994¿1998. El ratio deendeudamiento se contempla como una función de aquellos atributos específicos de lasempresas que han sido identificados por la teoría de la estructura de capital. Los resultadosobtenidos sugieren que, tanto los escudos fiscales alternativos a la deuda como la rentabilidadempresarial, se encuentran negativamente relacionados con el endeudamiento de las PYMEs,mientras que el tamaño, las oportunidades de crecimiento y la estructura de los activosinfluyen de forma positiva en la estructura de capital de las PYMEs. Estos resultados tambiénconfirman un comportamiento tendente a la conciliación de vencimientos de activos y pasivosen este grupo empresarial.

Suggested Citation

  • Francisco Sogorb- Mira, 2002. "How Sme Uniqueness Affects Capital Structure: Evidence From A 1994-1998 Spanish Data Panel," Working Papers. Serie EC 2002-18, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasec:2002-18
    as

    Download full text from publisher

    File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2002-18.pdf
    File Function: Fisrt version / Primera version, 2002
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hovakimian, Armen & Opler, Tim & Titman, Sheridan, 2001. "The Debt-Equity Choice," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 36(1), pages 1-24, March.
    2. Alejandro Casino & Cristina Aybar & José Lopez- Gracia, 2001. "Jerarquia De Preferencias Y Estrategia Empresarial En La Determinacion De La Estructura De Capital De La Pyme: Un Enfoque Con Datos De Panel," Working Papers. Serie EC 2001-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    3. Chittenden, Francis & Hall, Graham & Hutchinson, Patrick, 1996. "Small Firm Growth, Access to Capital Markets and Financial Structure: Review of Issues and an Empirical Investigation," Small Business Economics, Springer, vol. 8(1), pages 59-67, February.
    4. 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.
    5. Judith Jordan & Julian Lowe & Peter Taylor, 1998. "Strategy and Financial Policy in UK Small Firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(1‐2), pages 1-27, January.
    6. 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.
    7. Lopez-Gracia, Jose & Aybar-Arias, Cristina, 2000. "An Empirical Approach to the Financial Behaviour of Small and Medium Sized Companies," Small Business Economics, Springer, vol. 14(1), pages 55-63, February.
    8. James H. Scott Jr., 1976. "A Theory of Optimal Capital Structure," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 33-54, Spring.
    9. Bradley, Michael & Jarrell, Gregg A & Kim, E Han, 1984. "On the Existence of an Optimal Capital Structure: Theory and Evidence," Journal of Finance, American Finance Association, vol. 39(3), pages 857-878, July.
    10. Eugene F. Fama, 2002. "Testing Trade-Off and Pecking Order Predictions About Dividends and Debt," The Review of Financial Studies, Society for Financial Studies, vol. 15(1), pages 1-33, March.
    11. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    12. Edgar Norton, 1991. "Capital Structure and Small Growth Firms," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 1(2), pages 161-177, Winter.
    13. Gonzalo Mato, 1990. "Un análisis econométrico de la política de endeudamiento de las empresas con datos de panel," Investigaciones Economicas, Fundación SEPI, vol. 14(1), pages 63-83, January.
    14. Luigi Zingales, 2000. "In Search of New Foundations," Journal of Finance, American Finance Association, vol. 55(4), pages 1623-1653, August.
    15. Jesus Saa-Requejo, 1996. "Financing Decisions: Lessons from the Spanish Experience," Financial Management, Financial Management Association, vol. 25(3), Fall.
    16. Rajan, Raghuram G & Zingales, Luigi, 1995. "What Do We Know about Capital Structure? Some Evidence from International Data," Journal of Finance, American Finance Association, vol. 50(5), pages 1421-1460, December.
    17. Manuel Arellano & Olympia Bover, 1990. "La econometría de datos de panel," Investigaciones Economicas, Fundación SEPI, vol. 14(1), pages 3-45, January.
    18. Michaelas, Nicos & Chittenden, Francis & Poutziouris, Panikkos, 1999. "Financial Policy and Capital Structure Choice in U.K. SMEs: Empirical Evidence from Company Panel Data," Small Business Economics, Springer, vol. 12(2), pages 113-130, March.
    19. Graham, John R., 1996. "Debt and the marginal tax rate," Journal of Financial Economics, Elsevier, vol. 41(1), pages 41-73, May.
    20. de Miguel, Alberto & Pindado, Julio, 2001. "Determinants of capital structure: new evidence from Spanish panel data," Journal of Corporate Finance, Elsevier, vol. 7(1), pages 77-99, March.
    21. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    22. repec:bla:jfinan:v:43:y:1988:i:1:p:1-19 is not listed on IDEAS
    23. James S. Ang, 1992. "On the Theory of Finance for Privately Held Firms," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 1(3), pages 185-203, Spring.
    24. DeAngelo, Harry & Masulis, Ronald W., 1980. "Optimal capital structure under corporate and personal taxation," Journal of Financial Economics, Elsevier, vol. 8(1), pages 3-29, March.
    25. van der Wijst, Nico & Thurik, Roy, 1993. "Determinants of Small Firm Debt Ratios: An Analysis of Retail Panel Data," Small Business Economics, Springer, vol. 5(1), pages 55-65, March.
    26. Harris, Milton & Raviv, Artur, 1991. "The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
    27. Scott Holmes & Pam Kent, 1991. "An Empirical Analysis of the Financial Structure of Small and Large Australian Manufacturing Enterprises," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 1(2), pages 141-154, Winter.
    28. Warner, Jerold B, 1977. "Bankruptcy Costs: Some Evidence," Journal of Finance, American Finance Association, vol. 32(2), pages 337-347, May.
    29. Scott, James H, Jr, 1977. "Bankruptcy, Secured Debt, and Optimal Capital Structure," Journal of Finance, American Finance Association, vol. 32(1), pages 1-19, March.
    30. Ángel Estrada & Javier Vallés, 1998. "Investment and financial structure in Spanish manufacturing firms," Investigaciones Economicas, Fundación SEPI, vol. 22(3), pages 337-359, September.
    31. Myers, Stewart C., 1984. "Capital structure puzzle," Working papers 1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    32. Graham Hall & Patrick Hutchinson & Nicos Michaelas, 2000. "Industry Effects on the Determinants of Unquoted SMEs' Capital Structure," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 7(3), pages 297-312.
    33. Myers, Stewart C, 1984. "The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-592, July.
    34. Harris, Milton & Raviv, Artur, 1990. "Capital Structure and the Informational Role of Debt," Journal of Finance, American Finance Association, vol. 45(2), pages 321-349, June.
    35. Michael J. Barclay & Clifford W. Smith, 1999. "The Capital Structure Puzzle: Another Look At The Evidence," Journal of Applied Corporate Finance, Morgan Stanley, vol. 12(1), pages 8-20, March.
    36. Michael J. Barclay & Clifford W. Smith & Ross L. Watts, 1995. "The Determinants Of Corporate Leverage And Dividend Policies," Journal of Applied Corporate Finance, Morgan Stanley, vol. 7(4), pages 4-19, January.
    37. Stewart C. Myers, 1984. "Capital Structure Puzzle," NBER Working Papers 1393, National Bureau of Economic Research, Inc.
    38. James S. Ang, 1991. "Small Business Uniqueness and the Theory of Financial Management," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 1(1), pages 1-13, Spring.
    39. Shyam-Sunder, Lakshmi & C. Myers, Stewart, 1999. "Testing static tradeoff against pecking order models of capital structure," Journal of Financial Economics, Elsevier, vol. 51(2), pages 219-244, February.
    40. Ang, James S & Chua, Jess H & McConnell, John J, 1982. "The Administrative Costs of Corporate Bankruptcy: A Note," Journal of Finance, American Finance Association, vol. 37(1), pages 219-226, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. ManYing Kang & Marcel Ausloos, 2017. "An Inverse Problem Study: Credit Risk Ratings as a Determinant of Corporate Governance and Capital Structure in Emerging Markets: Evidence from Chinese Listed Companies," Economies, MDPI, vol. 5(4), pages 1-23, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Francisco Sogorb- Mira & José Lopez- Gracia, 2003. "Pecking Order Versus Trade-Off: An Empirical Approach To The Small And Medium Enterprise Capital Structure," Working Papers. Serie EC 2003-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    3. Maria Psillaki & Nikolaos Daskalakis, 2009. "Are the determinants of capital structure country or firm specific?," Small Business Economics, Springer, vol. 33(3), pages 319-333, October.
    4. Maurizio La Rocca & Tiziana La Rocca & Alfio Cariola, 2011. "Capital Structure Decisions During a Firm's Life Cycle," Small Business Economics, Springer, vol. 37(1), pages 107-130, July.
    5. Sanjiva Prasad & Christopher J. Green & Victor Murinde, 2005. "Company Financial Structure: A Survey and Implications for Developing Economies," Chapters, in: Christopher J. Green & Colin Kirkpatrick & Victor Murinde (ed.), Finance and Development, chapter 12, Edward Elgar Publishing.
    6. Sardo, Filipe & Serrasqueiro, Zélia & Armada, Manuel Rocha, 2022. "The importance of owner loans for rebalancing the capital structure of small knowledge-intensive service firms," Research in International Business and Finance, Elsevier, vol. 61(C).
    7. Iván Arribas & Emili Tortosa-Ausina & TingTing Zhu, 2021. "Optimal capital structure, model uncertainty, and European SMEs," Working Papers 2021/11, Economics Department, Universitat Jaume I, Castellón (Spain).
    8. José López-Gracia & Francisco Sogorb-Mira, 2008. "Testing trade-off and pecking order theories financing SMEs," Small Business Economics, Springer, vol. 31(2), pages 117-136, August.
    9. Van Campenhout, Geert & Van Caneghem, Tom, 2009. "Information Availability, Information Quality and the Financial Structure of Belgian SME's," Working Papers 2009/27, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    10. Viet Anh Dang, 2005. "Testing the Trade-off and Pecking Order Theory: Some UK Evidence," Money Macro and Finance (MMF) Research Group Conference 2005 28, Money Macro and Finance Research Group.
    11. Thi Hong Hoang & Călin Gurău & Amine Lahiani & Thuy-Luu Seran, 2018. "Do crises impact capital structure? A study of French micro-enterprises," Small Business Economics, Springer, vol. 50(1), pages 181-199, January.
    12. Rana El Bahsh & Ali Alattar & Aziz N. Yusuf, 2018. "Firm, Industry and Country Level Determinants of Capital Structure: Evidence from Jordan," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 175-190.
    13. Zélia Serrasqueiro & Ana Caetano, 2015. "Trade-Off Theory versus Pecking Order Theory: capital structure decisions in a peripheral region of Portugal," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(2), pages 445-466, April.
    14. María Palacín-Sánchez & Luis Ramírez-Herrera & Filippo di Pietro, 2013. "Capital structure of SMEs in Spanish regions," Small Business Economics, Springer, vol. 41(2), pages 503-519, August.
    15. Sanjiva Prasad & Christopher J. Green & Victor Murinde, 2001. "Company Financing, Captial Structure, and Ownership: A Survey, and Implications for Developing Economies," SUERF Studies, SUERF - The European Money and Finance Forum, number 12 edited by Morten Balling, May.
    16. D. Balios & N. Daskalakis & N. Eriotis & D. Vasiliou, 2016. "SMEs capital structure determinants during severe economic crisis: The case of Greece," Cogent Economics & Finance, Taylor & Francis Journals, vol. 4(1), pages 1145535-114, December.
    17. Le, Hoang Duc & Viet, Nguyen Quang & Anh, Nguyen Huaong, 2021. "Trade-Off Theory and Pecking Order Theory: Evidence from Real Estate Companies in Vietnam," OSF Preprints hc6ne, Center for Open Science.
    18. Nikolaos Daskalakis & Eleni Tsota, 2023. "Reintroducing Industry Effects in Capital Structure Determination of SMEs," Business & Entrepreneurship Journal, SCIENPRESS Ltd, vol. 12(2), pages 1-4.
    19. Ciarán mac an Bhaird & Brian Lucey, 2010. "Determinants of capital structure in Irish SMEs," Small Business Economics, Springer, vol. 35(3), pages 357-375, October.
    20. Temimi, Akram & Zeitun, Rami & Mimouni, Karim, 2016. "How does the tax status of a country impact capital structure? Evidence from the GCC region," Journal of Multinational Financial Management, Elsevier, vol. 37, pages 71-89.

    More about this item

    Keywords

    Financing; Capital Structure; Trade ¿ Off Theory; Pecking Order Theory; SME; Panel Data. Financiación; estructura de capital; ¿Trade-off Theory¿; ¿Pecking Order Theory¿; PYME; Panel de Datos.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ivi:wpasec:2002-18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Departamento de Edición (email available below). General contact details of provider: https://edirc.repec.org/data/ievages.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.