Information asymmetry and capital structure: an empirical study of micro firms in Sweden

Darush Yazdanfar

International Journal of Entrepreneurship and Small Business, 2012, vol. 17, issue 3, 304-318

Abstract: This study empirically examines the capital structure determinants of Swedish micro companies by testing hypotheses based on information asymmetry theory. The study sample contains 20,270 micro firms for which complete 2007 to 2008 financial information is available, giving a total of 182,430 observations. The empirical results indicate that six explanatory variables, that is, lagged long-term debt, size, age, profitability, tangibility, and industry affiliation, are related to capital structure to various extents. The results suggest that information asymmetry theory is relevant in explaining the financial behaviour of micro firms in Sweden. These findings can help SMEs to improve their awareness of financial management and to use resources more effectively.

Keywords: capital structure; SME finance; information asymmetry; pecking order; micro-enterprises; micro-businesses; micro-firms; Sweden; micro-companies; explanatory variables; lagged long-term debt; company size; company age; profitability; tangibility; industry affiliation; financial behaviour; financial management; resource usage; small and medium-sized enterprises; SMEs; entrepreneurs; entrepreneurship research; Europe. (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=49579 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijesbu:v:17:y:2012:i:3:p:304-318

Access Statistics for this article

More articles in International Journal of Entrepreneurship and Small Business from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().