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Short- and long-term debt determinants in Swedish SMEs

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Publication Details

Author list: Yazdanfar, Darush;Öhman, Peter

Publication year: 2017

Start page: 106

End page: 124

Number of pages: 19

ISSN: 1475-7702

DOI: http://dx.doi.org/10.1108/RAF-08-2015-0118

View additional information: View in Web of Science


Abstract

Purpose: This paper aims to empirically investigate the capital structure determinants of small and medium-sized enterprises (SMEs) with a particular focus on short- and long-term debt.

Design/methodology/approach: Several methods were used to analyse a sample of 15,897 Swedish SMEs for which complete financial information was available for a four-year period following the 2008 financial crisis, i.e. the 2009-2012 period.

Findings: The results indicate that eight explanatory variables - i.e. size, age, growth, proftability, liquidity, asset tangibility, non-debt tax shields and industry affliation - are associated to various extents with SME debt policy. Research limitations/implications - The current study is limited to examining a sample of Swedish SMEs in five industry sectors covering the 2009-2012 period. Further research could examine the generalizability of the present results by considering other countries, industry sectors and periods.

Practical implications - As debt policy infuences firm performance, value and survival, SME owners and managers, regulators and financial institutions may beneft from studies considering a relatively large number of capital structure determinants, several of which are linked to short- and long-term debt in various ways.

Originality/value: This study is one of the few to examine the determinants of short- and long-term debt in SMEs, which play a fundamental role in the economy, using a large-scale cross-sectional database covering a period following the 2008 financial crisis.


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