{"title":"Comparing Financial Debt Choices of Existing and New SMEs in Indian Manufacturing Sector","authors":"KG Suresh, Akanksha Saxena, M. Srikanth","doi":"10.1007/s10690-022-09382-8","DOIUrl":null,"url":null,"abstract":"<div><p>The study examines the differences in financial debt choices of SME and Non-SME firms in India. Being SMEs, firms enjoy special grants and packages that non-SMEs firms do not, and very often, the SMEs do not want to let go of the SME status. This brings in the information asymmetry and agency problem among the market participants and this may result in differences in the debt choices of the firms. We found that the existing SMEs use more unsecured debt, the newly added SMEs use more long-term debt and secured debt reflecting firm-specific growth opportunities. This shows the difference in capital structure decisions of SMEs operated under different policy environments sourced because of the conflict of interests among the participants.</p></div>","PeriodicalId":54095,"journal":{"name":"Asia-Pacific Financial Markets","volume":"30 3","pages":"445 - 456"},"PeriodicalIF":2.5000,"publicationDate":"2022-10-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asia-Pacific Financial Markets","FirstCategoryId":"1085","ListUrlMain":"https://link.springer.com/article/10.1007/s10690-022-09382-8","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
The study examines the differences in financial debt choices of SME and Non-SME firms in India. Being SMEs, firms enjoy special grants and packages that non-SMEs firms do not, and very often, the SMEs do not want to let go of the SME status. This brings in the information asymmetry and agency problem among the market participants and this may result in differences in the debt choices of the firms. We found that the existing SMEs use more unsecured debt, the newly added SMEs use more long-term debt and secured debt reflecting firm-specific growth opportunities. This shows the difference in capital structure decisions of SMEs operated under different policy environments sourced because of the conflict of interests among the participants.
期刊介绍：
The current remarkable growth in the Asia-Pacific financial markets is certain to continue. These markets are expected to play a further important role in the world capital markets for investment and risk management. In accordance with this development, Asia-Pacific Financial Markets (formerly Financial Engineering and the Japanese Markets), the official journal of the Japanese Association of Financial Econometrics and Engineering (JAFEE), is expected to provide an international forum for researchers and practitioners in academia, industry, and government, who engage in empirical and/or theoretical research into the financial markets. We invite submission of quality papers on all aspects of finance and financial engineering.
Here we interpret the term ''financial engineering'' broadly enough to cover such topics as financial time series, portfolio analysis, global asset allocation, trading strategy for investment, optimization methods, macro monetary economic analysis and pricing models for various financial assets including derivatives We stress that purely theoretical papers, as well as empirical studies that use Asia-Pacific market data, are welcome.
Officially cited as: Asia-Pac Financ Markets
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