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How Do SMEs with Single and Multiple Owners Finance Their Operations Differently? Empirical Evidence from China
Author(s) -
Newman Alexander,
Borgia Daniel,
Deng Ziliang
Publication year - 2013
Publication title -
thunderbird international business review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.553
H-Index - 37
eISSN - 1520-6874
pISSN - 1096-4762
DOI - 10.1002/tie.21568
Subject(s) - business , pecking order , china , debt , capital structure , finance , asset (computer security) , pecking order theory , capital (architecture) , empirical evidence , order (exchange) , empirical research , industrial organization , history , philosophy , computer security , archaeology , epistemology , evolutionary biology , political science , computer science , law , biology
We study the impact of firm‐level characteristics on the capital structures of private small and medium‐sized enterprises (SMEs) as well as the differences between the capital structures adopted by SMEs with single and multiple owners in China. Our findings highlight the limited use of asset‐based financing by Chinese SMEs. We also find that the propensity of SMEs with single‐owners to use external debt was significantly less than those with multiple owners. Furthermore, our findings suggest that single‐owned firms are subject to a more constrained pecking order than those with multiple owners. © 2013 Wiley Periodicals, Inc.