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Determinants Of The Firm’S Capital Structure - The Case Of The Very Small Enterprises

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  • EVALDO GUIMARÃES BARBOSA

    (Brazilian Federal Tax Secretariat)

  • CRISTIANA DE CASTRO MORAES

    (Espírito Santo State Government)

Abstract

This paper seeks empirically to identify the determinants of the very small firms’ financial leverage. This is important because both these enterprises have been under-researched and research in the area has been troubled by samples biased towards very large enterprises. Results support hypotheses that size, growth, operational cycle and entrepreneur’s risk tolerance are positively and business risk, asset composition, profitability and inflation negatively associated with financial leverage. Additionally, there is support for a hypothesized relationship with industry but not with enterprise age. To achieve a wider understanding of these relationships, financial leverage is studied in combination with own working capital.

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File URL: http://128.118.178.162/eps/fin/papers/0302/0302001.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Finance with number 0302001.

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Length: 73 pages
Date of creation: 07 Feb 2003
Date of revision: 14 Feb 2003
Handle: RePEc:wpa:wuwpfi:0302001

Note: Type of Document - Adobe Acrobat(pdf); pages: 73 ; figures: included
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Web page: http://128.118.178.162

Related research

Keywords: Financial Leverage; Capital Structure; Financial Structure; Small Business Finance;

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References

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