On the Relevance of Agency Conflicts in SME Debt Maturity Structure

Jose Lopez‐gracia and Reyes Mestre‐barberá

Journal of Small Business Management, 2015, vol. 53, issue 3, 714-734

Abstract: Previous theoretical research asserts that an optimal policy of debt maturity structure mitigates the various agency conflicts that arise through debt contracts. We test this hypothesis on Small and Medium‐Sized Enterprises (), which are very sensitive to agency problems. Such problems mainly arise between owners and debt providers, due to recording high growth and having few fixed assets and informational asymmetry. We provide evidence on the relevant effect of underinvestment, asset substitution, and overinvestment problems on debt structure. Results appear to be robust to both the endogeneity problem of explanatory variables and the censored dependent variable.

Date: 2015
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DOI: 10.1111/jsbm.12083

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