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Capital structure determinants and adjustment speed: An empirical analysis of Dutch SMEs

Remco Mocking and Joep Steegmans
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Remco Mocking: CPB Netherlands Bureau for Economic Policy Analysis
Joep Steegmans: CPB Netherlands Bureau for Economic Policy Analysis

CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: This paper presents empirical evidence of both the determinants and the adjustment speed of capital structure of small and medium-sized enterprises (SMEs) in the Netherlands. Using an administrative panel data set of the period 2000-2014, containing 153,923 fi rms, we estimate a partial adjustment model through system GMM. The results show that firm size and pro tability reduce debt to assets ratios, while tangible assets, depreciation, and marginal taxes increase them. Growth of assets is either statistically or economically insigni cant. The estimated adjustment speed parameter is 0.748, indicating that the adjustment process is particularly slow in the Netherlands.

JEL-codes: G24 G28 F23 H25 H26 H87 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-ent and nep-sbm
Date: 2017-08
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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:357

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