On the adjustment speed of SMEs to their optimal capital structure

Autor:	Cristina Aybar-Arias, José López-Gracia, Alejandro Casino-Martínez
Rok vydání:	2011
Předmět:	Economics and Econometrics Entrepreneurship Capital structure media_common.quotation_subject General Business Management and Accounting Sample mean and sample covariance Debt Econometrics Economics Leverage (statistics) Marketing Empirical evidence media_common Panel data
Zdroj:	Small Business Economics. 39:977-996
ISSN:	1573-0913 0921-898X
DOI:	10.1007/s11187-011-9327-6
Popis:	The aim of this paper is to analyse the speed of adjustment of small and medium-sized enterprises (SMEs) to the target leverage. By applying a system GMM technique to Spanish panel data collected during the period 1995–2005, we estimate a partial adjustment model in which both target leverage and speed of adjustment are simultaneously endogenized. We provide empirical evidence on the determinants of target leverage and the speed of adjustment. More specifically, the rate of financial flexibility, growth opportunities and size are positively related to the speed of adjustment, whereas the distance to the optimal ratio of debt shows a negative impact. Our findings demonstrate that, in terms of sample mean, a high percentage of Spanish SMEs adjust rationally to their target. Additionally, the SMEs analysed appeared to be over-levered and fairly motivated to adjust (annual adjustment speed: 26%).
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::4f4eb917b7e746ef95bebd5816d5dd79 https://doi.org/10.1007/s11187-011-9327-6 Zobrazit plný text záznamu