Small Business Economics

, Volume 14, Issue 1, pp 55–63

An Empirical Approach to the Financial Behaviour of Small and Medium Sized Companies

  • Jose Lopez-Gracia
  • Cristina Aybar-Arias

DOI: 10.1023/A:1008139518709

Cite this article as:
Lopez-Gracia, J. & Aybar-Arias, C. Small Business Economics (2000) 14: 55. doi:10.1023/A:1008139518709


This paper shows how the financial behaviour of small and medium sized companies is influenced by size and business sector. This idea underlies two research approaches to capital structure: (i) credit rationing, and (ii) the pecking order theory. Both approaches are based on asymmetric information and have been widely developed over the past two decades. An analysis has been carried out on 1000 Valencian companies that were randomly selected from the state company registry. These companies were divided by size before analysis. As an innovation, the investigation implements a multivariate MANOVA model that takes into account two key variables in the financing of small and medium firms. Our results show that size influences company self-financing strategies, and that business sector influences short-term financial policy.

Copyright information

© Kluwer Academic Publishers 2000

Authors and Affiliations

  • Jose Lopez-Gracia
    • 1
  • Cristina Aybar-Arias
    • 1
  1. 1.Department of Accounting, Edificio Departamental Oriental, Facultad de Ciencias Económicas y EmpresarialesUniversidad de ValenciaValenciaSpain

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