Capital structure of SMEs in Spanish regions
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This article examines whether the capital structure of small and medium-sized enterprises (SMEs) and its firm-factor determinants are different across regions belonging to a single country. This subject is relatively innovative in capital structure research, since the majority of the studies carried out in a single country have neglected to take into account the region in which firms operate to explain leverage. To this end, we study whether the capital structure and its firm-factor determinants—size, asset structure, profit, growth, and age—differ depending on the region in which the SMEs are located. For the empirical analysis, panel data methods are applied to a sample of firms from all regions of Spain for the period 2004–2007. Our results not only suggest that there are regional differences in the SMEs capital structure but also confirm that the impact of firm-factor determinants on leverage differs across regions in terms of signs, magnitudes and significance levels.
KeywordsCapital structure SME Panel data
JEL ClassificationsC23 G32 L26
This work has been supported in part by project P09-FQM-5052 of the Andalusia CICE, Spain. This research is also part of the project SEJ381 financed by the Economy, Innovation and Science Agency of Andalusia. We thank two anonymous referees for comments that improved the paper.
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