Small and Medium Enterprises’ Financing and Investment Decision: An Empirical Study

Sanjeev Gupta, Shaveta Gupta, Anu Sahi and Nitish Kamra

The IUP Journal of Financial Economics, 2007, vol. V, issue 2, 60-75

Abstract: The Small and Medium Enterprises (SMEs) are of immense importance for the social and economic development of any economy. They significantly account for the gross domestic product of a country. But still majority of the Asian countries are suffering from underdeveloped SMEs. Though all firms face financial constraints, but as far as the SMEs are concerned, the picture is quite diverse and worse than other organizations. Few major reasons for this can be attributed to the dearth of finance, defective economic system, and imperfect financing and investment decisions. Keeping this in mind, this paper is an attempt to showcase the current practices of the SMEs of Punjab, regarding their financing (Capital Structure) and investment (Capital Budgeting) decisions. Around 75 SMEs of Punjab were surveyed, and the results were based on their response to various attributes. The paper also attempted to convey the general perception of the SMEs towards capital budgeting and capital structure decisions.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjfe:v:05:y:2007:i:2:p:60-75

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