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Industry Effects on the Determinants of Unquoted SMEs' Capital Structure

  • Graham Hall
  • Patrick Hutchinson
  • Nicos Michaelas
Registered author(s):

    This paper reports a study of 3500 unquoted, UK small and medium sized enterprises (SMEs). The objectives of the research were to test various hypotheses concerning the determinants of SME capital structure and to establish whether and how the relationship of these determinants to long- and short-term debt varied between industries. Long-term debt was found to be related positively to asset structure and company size and negatively to age; short-term debt was related negatively to profitability, asset structure, size and age and positively to growth. Significant variation across industries was found in most of the explanatory variables. The effect of growth on short-term debt, however, was consistent across industries whilst profitability had no effect on long-term borrowing in any industry.

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    File URL: http://www.tandfonline.com/10.1080/13571510050197203
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    Article provided by Taylor & Francis Journals in its journal International Journal of the Economics of Business.

    Volume (Year): 7 (2000)
    Issue (Month): 3 ()
    Pages: 297-312

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    Handle: RePEc:taf:ijecbs:v:7:y:2000:i:3:p:297-312
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