Abstract
The aim of this study was to contribute to the literature debate on financial behavior and corporate capital structure by focusing on two aspects. First of all, we analyzed how the intensity of exports and therefore the percentage weight of foreign sales compared to total sales affect the leverage of companies. Secondly, we have analyzed which are the most significant factors influencing the financial behavior of SMEs. The financial information for the analysis were collected from the Sabi database of Bureau Van Dijk (BVD). To select the companies to be included in the sample, we followed a methodology capable of ensuring that the sample of export oriented and non-export oriented companies was adequately represented. The overall sample size was 2000 companies. The analysis showed that export intensity has a negative and significant impact on leverage, suggesting that as exports increase, leverage decreases. In addition, profitability and business risk are negatively related to leverage, while the tangibility of the assets and growth correlates positively with leverage.
Highlights
Over the past few years, research into financial behavior and determinants of the capital structure of SMEs has been the subject of growing debate
Sample Selection The financial information for the analysis was collected from the Sabi database of Bureau Van Dijk (BVD) and regards the period 2010-2016
Generalized Method of Moments (GMM) To study the financial behavior of SMEs we used a dynamic panel model based on the Generalized Method of Moments (GMM)
Summary
Over the past few years, research into financial behavior and determinants of the capital structure of SMEs has been the subject of growing debate. This circumstance was favored by the recognition that the empirical results obtained from the analysis of large enterprises (Aggarwal, 1981; Harris and Raviv, 1991; Rajan and Zingales, 1995; Chakraborty, 2010) could not be generalized for the SMEs (Berger and Udell, 1998; Mac an Bhaird, 2010). We want to analyze how the intensity of exports and the percentage weight of foreign sales compared to total sales affect the financial leverage of companies. We intend to contribute to the existing literature by analyzing how the intensity of export activity affects the financial leverage and corporate capital structure
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