Work

Are the Implications of the Financial Growth Cycle Confirmed for Spanish Smes?

Year: 2012

Type: article

Abstract: The aim of this paper is to analyze whether some of the empirical implications of the financial growth cycle hold in a sample of Spanish SMEs. We use a sample of 5,944 observations for the year 2007 and test several hypotheses using MANOVA analysis. The results show that companies tend to have different financing structures depending on their age and size. Hypotheses about trade credit, short term debt and risk are confirmed with respect to age, as the younger companies tend to use proportionally more trade credit and short term debt, and are riskier. Size is also associated in the expected way with trade credit, relative trade credit and relative short-term financial debt. On the other hand hypotheses about equity and the financing deficit are not confirmed. The effect of a pecking order behaviour over a long period of time may provide an explanation of why these two hypotheses are not confirmed.

Source: Journal of Business Economics and Management

DOI: 10.3846/16111699.2011.620161

Authors: Javier Sánchez-Vidal, Juan Francisco Martín-Ugedo

Institution: Universidad Politécnica de Cartagena

Language: English

Topic: Working Capital and Financial Performance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $647