IDEAS home Printed from
   My bibliography  Save this article

Capital structure of small and medium enterprises


  • V. Grinchenko


The article analyzes the results of a research on the capital structure of small and medium business and identifies the financing peculiarities of Ukrainian and European enterprises. The author calculates the financial leverage of Ukrainian companies and shows that Ukrainian SMEs have higher level of financial leverage and risk compared with large enterprises. Structure of equity and debt financing was analyzed. It was determined that small and medium enterprises have a higher proportion of authorized capital in the structure of financial resources due to the lower possibility of attracting debt financing. The high level of retained losses of Ukrainian small and medium enterprises demonstrates the failure to finance their activities from internal sources, as well as a higher probability of bankruptcy. The author analyzed the debt structure of Ukrainian firms and revealed a significant prevalence of short-term debt in the debt structure of enterprises of all sizes due to intensive usage of trade credit. At the same time, it was found that a high level of financial leverage of European SMEs was mainly caused by intensive usage of bank lending, but not accounts payable. It was identified that the capital structure of SMEs in Italy, Portugal and Slovakia are similar to Ukrainian enterprises.

Suggested Citation

  • V. Grinchenko, 2016. "Capital structure of small and medium enterprises," Economy and Forecasting, Valeriy Heyets, issue 1, pages 142-156.
  • Handle: RePEc:eip:journl:y:2016:i:1:p:142-156

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Berger, Allen N & Udell, Gregory F, 1995. "Relationship Lending and Lines of Credit in Small Firm Finance," The Journal of Business, University of Chicago Press, vol. 68(3), pages 351-381, July.
    2. Graham C. Hall & Patrick J. Hutchinson & Nicos Michaelas, 2004. "Determinants of the Capital Structures of European SMEs," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 31(5-6), pages 711-728.
    3. Gavin Cassar & Scott Holmes, 2003. "Capital structure and financing of SMEs: Australian evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 0(2), pages 123-147.
    4. Giovanni Trovato & Marco Alfó, 2006. "Credit rationing and the financial structure of Italian small and medium enterprises," Journal of Applied Economics, Universidad del CEMA, vol. 9, pages 167-184, May.
    5. Harris, Milton & Raviv, Artur, 1991. " The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    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:eip:journl:y:2016:i:1:p:142-156. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Iryna Bazhal). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.