Corporate governance, credit ratings and the capital structure of Greek SME and large listed firms
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The aim of this study was to elucidate the relationship between corporate governance, credit ratings and the capital structure of small-to-medium enterprises (SMEs) and large Greek listed firms for the period spanning from 2005 to 2010. Panel regression analysis demonstrates that corporate governance structures and credit ratings play a significant role in the capital structure of Greek listed firms, especially during the crisis period (2008–2010). Moreover, firm-specific determinants such as size, profitability, asset structure and growth opportunities are also significant determinants of leverage. Finally, we detect that the influence of corporate governance variables on the capital structure of SMEs is less evident compared with large firms. We attribute this to the active involvement of owners in the management of SMEs, which reduces the need for shareholders to bear the costs of monitoring agents.
KeywordsCorporate governance Credit ratings Capital structure SMEs ASE
JEL ClassificationsC23 G32 L26
The authors would like to thank three anonymous reviewers and the editor for useful comments and suggestions, which have considerably improved the paper. The first author acknowledges financial support from the Greek State Foundation of Scholarships (IKY).
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