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Publication
Efficiency and capital structure in Portuguese SMEs
Advisor(s)
Abstract(s)
This paper aims to analyse the bi-directional relationship between technical efficiency, as a measure of companies’ performance, and capital structure, under the agency cost theory as well as the pecking order and trade-off theory, to explain the capital structure decisions. The technical efficiency was estimated by the DEA method and corrected by using a suitable bootstrap to obtain statistical inferences. To test the agency cost hypothesis, asymmetric information hypothesis, risk-efficiency hypothesis and franchise value hypothesis (under pecking order and trade off theories framework), two models were applied using some determinants of capital structure such as size, profitability, tangibility, liquidity as control and explanatory variables through a truncated regression with bootstrapping. From an initial sample of 1024 small and medium sized companies from the interior of Portugal, for the period 2006–2009, a subsample of 210 SMEs from secondary and tertiary
sectors was selected. The results suggest that medium sized companies have higher average bias-corrected efficiency than small companies; that short-term leverage is positively related to efficiency and that the companies in the sample follow pecking order theory.
Description
Keywords
Data envelopment analysis Technical efficiency Capital structure SME Inland of Portugal
Pedagogical Context
Citation
Fernandes, António B.; Vaz, Clara B.; Monte, Ana Paula (2017). Chapter 8: efficiency and capital structure in Portuguese SMEs.. In Vaz, A.I. [et al.] (Eds) Operational Research IO2017. Springer Verlag. 223, p. 101-119. ISBN 978-3-319-71583-4
Publisher
Springer Verlag