Comparing Financial Debt Choices of Existing and New SMEs in Indian Manufacturing Sector

Suresh Kg (), Akanksha Saxena and M. Srikanth
Additional contact information
Suresh Kg: ICFAI Business School (IBS)
Akanksha Saxena: Indian Institute of Management (IIM)
M. Srikanth: National Institute of Rural Development & Panchayati Raj

Asia-Pacific Financial Markets, 2023, vol. 30, issue 3, No 1, 445-456

Abstract: Abstract The study examines the differences in financial debt choices of SME and Non-SME firms in India. Being SMEs, firms enjoy special grants and packages that non-SMEs firms do not, and very often, the SMEs do not want to let go of the SME status. This brings in the information asymmetry and agency problem among the market participants and this may result in differences in the debt choices of the firms. We found that the existing SMEs use more unsecured debt, the newly added SMEs use more long-term debt and secured debt reflecting firm-specific growth opportunities. This shows the difference in capital structure decisions of SMEs operated under different policy environments sourced because of the conflict of interests among the participants.

Keywords: SME; Debt Structure; Agency Problem (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10690-022-09382-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:kap:apfinm:v:30:y:2023:i:3:d:10.1007_s10690-022-09382-8

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/10690/PS2

DOI: 10.1007/s10690-022-09382-8

Access Statistics for this article

Asia-Pacific Financial Markets is currently edited by Jiro Akahori

More articles in Asia-Pacific Financial Markets from Springer, Japanese Association of Financial Economics and Engineering
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().