Capital structure in Colombian SMEs: a semi-systematic literature review from trade-off, pecking order, agency, and psychological empowerment perspectives

Zuray Andrea Melgarejo Molina, Mayda Alejandra Calderon-Diaz and Felipe Alejandro Torres-Castro
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Zuray Andrea Melgarejo Molina: Universidad Nacional De Colombia
Mayda Alejandra Calderon-Diaz: Universidad Nacional De Colombia
Felipe Alejandro Torres-Castro: Universidad de los Andes

Revista Tendencias, 2026, vol. 27, issue 02, 292-315

Abstract: Introduction: Capital structure remains a central topic in corporate finance, particularly in emerging economies where institutional constraints, governance mechanisms, and managerial behavior influence financing decisions. Understanding capital structure in ColombianSMEs requires integrating multiple theoretical perspectives. Objective: To analyze the theoretical and empirical evidence on capital structure decisions in Colombian SMEs from the perspectives of Trade-Off Theory, Pecking Order Theory, Agency Theory, and Psychological Empowerment. Methodology: A semi-systematic literature review was conducted following the PRISMA 2020 guidelines. Searches were performed in Scopus and Web of Science between March and May 2025. The selection process included identification, screening, eligibility assessment, and inclusion, resulting in 27 studies for analysis. Results: No single theory fully explains financing decisions in Colombian SMEs. Trade-Off and Pecking Order theories explain leverage and financing preferences, Agency Theory highlights ownership structures and information asymmetries, and Psychological Empowerment emphasizes managerial autonomy and behavioral influences. Discussion: Capital structure decisions arise from the interaction of financial, governance, and behavioral factors shaped by firm characteristics and institutional conditions. Conclusions: A multidimensional perspective provides a more comprehensive understanding of capital structure decisions in Colombian SMEs. The study contributes by integrating financial, organizational, and behavioral explanations and identifying avenues for future research

Keywords: behavioral finance; corporate governance; financing decisions; informationasymmetry; managerial behavio (search for similar items in EconPapers)
JEL-codes: D23 G32 G41 L25 M10 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:col:000520:023331

DOI: 10.22267/rtend.26272.305

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