Debt financing as moderator in the relationship between intellectual capital and SMEs performance

Sarmad Ali, Adalberto Rangone and Gregorio Martín- de Castro

Management Research Review, 2024, vol. 48, issue 13, 1-19

Abstract: Purpose - This study aims to analyze the moderating role of debt financing in the relationship between intellectual capital (IC) and small and medium enterprise (SME) performance in high-tech and low-tech industries. Design/methodology/approach - This longitudinal study uses a balanced panel sample of 7,293 (3,563 high-tech and 3,730 low-tech) SMEs in Southwestern European countries from 2013 to 2020. The data are analyzed using a fixed-effect model as baseline estimation, and a generalized method of moments estimation is used for robustness checks. Findings - The results show strong positive effects of human capital (HC) and structural capital (SC) and a weak effect of capital employed (CE), on the performance of high-tech SMEs. Debt financing is negatively and significantly associated with SME performance, and the moderating effect of debt financing is more significant in low-tech industries. Specifically, debt financing accentuates (attenuates) the positive effect of HC (SC and CE) on the performance of low-tech SMEs. Practical implications - This study offers a valuable framework for managers and policymakers when considering the role of debt financing in the IC components – SME performance relationship in distinctive industrial environments. Originality/value - This study provides new insights into the close and complex relationships between IC components, debt financing and SME performance.

Keywords: Intellectual capital; Debt financing; SMEs performance; Technological intensity; Europe (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:mrrpps:mrr-07-2022-0505

DOI: 10.1108/MRR-07-2022-0505

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