SMEs: Externally and Internally Constrained? Evidence from Argentina

Anahí Briozzo (), Hernán Vigier (), Lisana B. Martinez () and Antonio Terceño ()
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Anahí Briozzo: Universidad Nacional del Sur, Department of Business Administra-tion, CONICET, Argentina
Hernán Vigier: Universidad Nacional del Sur, Department of Economics – Comisión de Investigaciones Científicas – Universidad Provincial del Sudoeste, Argentina
Lisana B. Martinez: Universidad Nacional del Sur, Department of Economics – IIES, CONICET, Universidad Provincial del Sudoeste, Argentina
Antonio Terceño: Faculty of Business and Economics, Universitat Rovira i Virgili, Spain

Chapter 2014-07 in Entrepreneurial/Managerial Innovative Strategies and Behaviour in Global Multicultural Environment. Proceedings of the Sixth International Conference, 9 – 12 September 2014, Nessebar, Bulgaria, 2015, pp 149-174 from Bulgarian Association for Management Development and Entrepreneurship

Abstract: This paper identifies three distinctive cases in small and medium enterprises (SME) financing decisions: trade-off behavior, pecking order behavior, and extreme aversion to debt. We compare the implications of these approaches with a dataset of firms from Bahía Blanca (Argentina) with the Multinomial Logit Model. We find that firm characteristics related to information asymmetries (firm age, size and legal form, as well as personal factors (owner’s age and education, and perception of bankruptcy costs) are relevant variables in SME’ financing behavior. These result show that both external and internal constraints contribute to explain SME’ financing decisions in a developing country.

Keywords: Financing decisions; Trade-off; Pecking order; Aversion to debt; SME; Multinomial Logit Model; Argentina (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:mdv:cpchap:y:2014:7

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