Determinants of the capital structure of small and medium sized Brazilian enterprises
AUTOR(ES)
Forte, Denis, Barros, Lucas Ayres, Nakamura, Wilson Toshiro
FONTE
BAR, Braz. Adm. Rev.
DATA DE PUBLICAÇÃO
2013-09
RESUMO
This 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.
Documentos Relacionados
- Adoption of Social Media by Small- and Medium-Sized Healthcare Enterprises
- Fostering linkages between transnational corporations and small to medium-sized enterprises in Brazil
- Exploring Risk Perception and Degree of Internationalization of Brazilian Small-and-Medium Enterprises
- The brazilian credit market for small and medium-sized firms: an adaptive marketing approach
- The forms of intermediation in the space of Brazilian micro and small-sized enterprises: SEBRAE, from foundation to performance in the 21st century