Determinants of the capital structure of small and medium sized Brazilian enterprises

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dc.contributor.authorForte D.
dc.contributor.authorBarros L.A.
dc.contributor.authorNakamura W.T.
dc.date.accessioned2024-03-13T01:04:19Z
dc.date.available2024-03-13T01:04:19Z
dc.date.issued2013
dc.description.abstractThis research investigates the determinants of the capital structure of small and medium enterprises (SMEs) using a unique database that includes over 19,000 Brazilian firms and spans 13 years of data. The econometric analysis employs the System Generalized Method of Moments estimator (GMM-Sys) and two strong results emerge: (a) profitability is negatively related to leverage, and (b) asset growth is positively related to leverage. Both results are consistent with the pecking order theory of capital structure and suggest that SMEs tend to finance their expansion with debt only after exhausting their internal resources. Additionally, we find weaker evidence for the following: (a) size is positively related to leverage, which can be interpreted as evidence that larger firms have more access to credit markets; (b) riskier SMEs tend to be less financially leveraged, consistent with the bankruptcy cost arguments from trade-off theories; and (c) the age of the firm is negatively related to financial leverage, suggesting that older SMEs may be slightly more conservative in their financing choices. Finally, the magnitude of the coefficient of lagged leverage shows the high persistence of this variable and is compatible with the hypothesis that SMEs adjust their debt/equity ratio towards a target value, although at a low speed.
dc.description.firstpage347
dc.description.issuenumber3
dc.description.lastpage369
dc.description.volume10
dc.identifier.doi10.1590/S1807-76922013000300007
dc.identifier.issn1807-7692
dc.identifier.urihttps://dspace.mackenzie.br/handle/10899/36596
dc.relation.ispartofBAR - Brazilian Administration Review
dc.rightsAcesso Aberto
dc.subject.otherlanguageCapital structure
dc.subject.otherlanguageCorporate finance
dc.subject.otherlanguageLeverage
dc.subject.otherlanguageSmall and medium enterprises (SMEs)
dc.titleDeterminants of the capital structure of small and medium sized Brazilian enterprises
dc.typeArtigo
local.scopus.citations48
local.scopus.eid2-s2.0-84880466809
local.scopus.updated2024-05-01
local.scopus.urlhttps://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=84880466809&origin=inward
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