Small Business Economics

, Volume 33, Issue 3, pp 319–333 | Cite as

Are the determinants of capital structure country or firm specific?

  • Maria PsillakiEmail author
  • Nikolaos Daskalakis


In this paper we investigate the capital structure determinants of Greek, French, Italian, and Portuguese small and medium-sized enterprises (SMEs). We compare the capital structures of SMEs across countries and differences in country characteristics, asset structure, size, profitability, risk, and growth and how these may impact capital structure choices. The results show that SMEs in these countries determine their capital structure in similar ways. We attribute these similarities to the country institutional and financial characteristics and the commonality of their civil law systems. However, structural differences arise due to firm specific effects. We find that size is positively related to leverage while the relationship between leverage and asset structure, profitability and risk is negative. Growth is not a statistically significant determinant of leverage for any of the four countries. Our main conclusion is that firm-specific rather than country facts explain differences in capital structure choices of SMEs.


Capital structure SME financing 

JEL Classifications

C23 G32 L26 



We are grateful to the Editor of this journal, two anonymous referees and to Dimitris Margaritis for their valuable comments.


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Copyright information

© Springer Science+Business Media, LLC. 2008

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of Nice-Sophia Antipolis, GREDEG-CNRS-DemosValbonneFrance
  2. 2.Department of Marketing and CommunicationAthens University of Economics and BusinessAthensGreece

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