 Do Small and Medium Sized Enterprises Match Their Assets and Liabilities? Evidence from PortugalJan Bartholdy, Cesario Mateus and Dennis Olson The International Journal of Business and Finance Research, 2012, vol. 6, issue 4, 13-31 Abstract: For small and medium-sized enterprises, various types of debt are not identical. There are specific costs and benefits associated with each funding source. We argue that the asset and liability sides of the balance sheet are interrelated. Specifically, we hypothesize that firms match specific assets with a specific set of liabilities. We test our theory using a unique sample of Portuguese firms for the years 1990-2000. Our data set identifies various short-term and long-term funding sources, as well as the uses of these funds to purchase various assets. Our results reject independence between the two sides of the balance sheet—suggesting that small and medium-sized firms in Portugal do indeed match specific assets with specific liabilities. The implication for financial theory is that each asset or project may have a different weighted average cost of capital. That is, there is no single weighted average cost of capital for a typical small to medium-sized firm. Keywords: Asset-Liability; SMEs; Capital Structure; Sources and Uses of Funds (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:6:y:2012:i:4:p:13-31 Access Statistics for this article The International Journal of Business and Finance Research is currently edited by Terrance Jalbert More articles in The International Journal of Business and Finance Research from The Institute for Business and Finance Research |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.