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Capital Structure Decisions: Old Issues, New Insights From High-Tech SMEs

Serrasqueiro, Z., P.M. Nunes, M.R. Armada (2016), "Capital Structure Decisions: Old Issues, New Insights From High-Tech SMEs", The European Journal of Finance, 22(1), 59-79.
Abstract:

Using panel data models and this study analyses the capital structure decisions of high-tech small- and medium-sized enterprises (SMEs) and non-high-tech SMEs. The results suggest that the capital structure decisions of high-tech SMEs are closer to what is predicted by the Pecking Order Theory. However, the results also suggest a modified version of the Pecking Order Theory for high-tech SMEs that have relied on venture capital. These firms prefer equity issues to debt, when internal finance is exhausted. The empirical evidence suggests that problems relating to information asymmetry as well as technological and market uncertainty influence the capital structure decisions of high-tech SMEs.