Do crises impact capital structure? A study of French micro-enterprises

Thi van Hoang, Călin Gurău (), Amine Lahiani () and Thuy-Luu Seran ()
Additional contact information
Thi van Hoang: Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School, MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier
Călin Gurău: Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School, MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier
Amine Lahiani: LEO - Laboratoire d'Économie d'Orleans - UO - Université d'Orléans - UT - Université de Tours
Thuy-Luu Seran: MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier

Post-Print from HAL

Abstract: This article analyses the impact of the global crisis on the relationship between firm-related factors (size, tangible and intangible assets, growth, and profitability) and the capital structure of French micro-enterprises. A panel of 4945 firms are studied comparatively over two periods: before (2003-2007) and during (2008-2013) the global crisis. During the global crisis, microenterprises survive by relying mostly on internal sources of financing. External leverage is reduced, as the increased information asymmetry and default risk raise the cost of debt. When necessary, micro-enterprises sell the underused or unnecessary tangible assets, as they focus on their main competence and develop their intangible assets: human skills, advertising, networking, brand name, and awareness. In addition, we show that the pecking order is the most relevant theory for predicting the financial decisions and situation of French MEs. These results provide interesting insights into the financial strategy of French micro-enterprises, facilitating understanding and action at academic and policy levels. Keywords Micro-enterprises. Capital structure. Firmrelated factors. Global crisis JEL classifications G32. L26 1 Following Benkraiem (2016), we refer to these crises as the global crisis hereafter. Furthermore, for simplicity reasons, Bcrisis^and Bglobal crisis^are used interchangeably.

Keywords: micro-enterprises; capital structure; firm-related factors; global crisis (search for similar items in EconPapers)
Date: 2017
Note: View the original document on HAL open archive server: https://hal.science/hal-03608784v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Small Business Economics, 2017, 50 (1), pp.181 - 199. ⟨10.1007/s11187-017-9899-x⟩

Downloads: (external link)
https://hal.science/hal-03608784v1/document (application/pdf)

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:hal:journl:hal-03608784

DOI: 10.1007/s11187-017-9899-x

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().