Capital structure of SMEs in Spanish regions

• Published in: Small business economics Vol. 41; no. 2; pp. 503 - 519
• Main Authors: Palacín-Sánchez, María José, Ramírez-Herrera, Luis M., di Pietro, Filippo
• Format: Journal Article
• Language: English
• Published: Boston Springer 01.08.2013; Springer US; Springer Nature B.V
• Subjects: Banking industry; Business and Management; Business structures; Capital structure; Countries; Debt; Determinants; Economic development; Economic models; Economic statistics; Economic theory; Entrepreneurship; Financial leverage; Industrial Organization; Innovation; Management; Microeconomics; Operations management; Panel data; Pecking order theory; Regional disparities; Regions; Short term debt; Size of enterprise; Small & medium sized enterprises-SME; Small and medium sized enterprises; Small businesses; Spain; Studies; Spain; L26; SME; Panel data; C23; Capital structure; G32
• ISSN: 0921-898X; 1573-0913
• DOI: 10.1007/s11187-012-9439-7

This article examines whether the capital structure of small and medium-sized enterprises (SMEs) and its firm-factor determinants are different across regions belonging to a single country. This subject is relatively innovative in capital structure research, since the majority of the studies carried out in a single country have neglected to take into account the region in which firms operate to explain leverage. To this end, we study whether the capital structure and its firm-factor determinants—size, asset structure, profit, growth, and age—differ depending on the region in which the SMEs are located. For the empirical analysis, panel data methods are applied to a sample of firms from all regions of Spain for the period 2004-2007. Our results not only suggest that there are regional differences in the SMEs capital structure but also confirm that the impact of firmfactor determinants on leverage differs across regions in terms of signs, magnitudes and significance levels.