Abstract
The main emphasis of this research is to empirically study the impact of debt financing on the firm performance of SMEs in India. Panel data analysis is applied to study the association among debt and SMEs firm performance using three financial measures: return on assets (ROA), return on equity (ROE), and gross profit margin (GPM). The sample includes 164 non-financial Indian small and medium enterprises listed in the Bombay stock exchange—Small and medium enterprises (BSE-SME) platform from 2014 to 2018. The results of the study demonstrate that capital structure, especially short-term and long-term debt, has an adverse effect on the efficiency of small and medium enterprises. The study reveals that decisions on capital structures have little impact on SMEs’ financial results. The analysis also proves that the pecking order theory relates to small- and medium-sized enterprises in India. This is the primary research that explores the connection between debt financing and the financial results of Indian SMEs listed on the BSE-SME platform.KeywordsCapital structureDebt financingFinancial performanceIndiaSMEs
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
