Traditional Debt Research Articles

Financing the small firm

This study presents a framework to delineate financing the small firm. Special consideration is given to small firms' unique financing sources such as trade and bank credit, entrepreneur's own resources, informal investment, and venture capital. The small firm has limited or no access to many traditional debt and equity markets that supply long term financing to the corporate world, and therefore operates in segmented and imperfect financial markets. The links between small firms' financing opportunities and managerial goals are traced from the start-up stage through establishing a mature firm. As the small firm matures, it operates in a broader financial market. This study establishes the foundation for future empirical research.

The Impact of State Regulatory Activity on the Use of Local Government Debt

: This article examines the effect of various state government regulatory, oversight, and assistance programs on the level of local government borrowing for a national sample of 2,087 communities with over 10,000 persons. Both traditional debt limits and referenda requirements and other state programs regulating or assisting local government borrowing are analyzed in a model of local debt choice. State-imposed local debt limits do appear to have a depressing effect on communities' debt levels. Of the other programs reviewed it appears that active rather than legislative state oversight and assistance activities have the greatest influence on the use of local debt. It is also concluded that future research should concentrate on the relationship between the borrowing activities of local governments and the variety of special districts that exist in metropolitan areas.