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Determinants of the Capital Structures of European SMEs
Author(s) -
Hall Graham C.,
Hutchinson Patrick J.,
Michaelas Nicos
Publication year - 2004
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.0306-686x.2004.00554.x
Subject(s) - capital structure , profitability index , debt , asset (computer security) , business , debt ratio , monetary economics , econometrics , economics , demographic economics , finance , computer security , computer science
The aim of this paper is to examine the degree to which the determinants of SMEs’ capital structures differ between European countries. The study is based on data for four thousand SMEs, five hundred from each of eight European countries. Regressions were run using short‐term and long‐term debt as dependent variables and profitability, growth, asset structure, size and age as independent variables. A key feature of this paper is the use of restricted and unrestricted regressions to isolate the country‐effect from the firm‐specific‐effect. The results show that variations are likely to be due to country differences as well as firm‐specific ones.