{"title":"The Dynamics of SMEs' Capital Structure and Performance: Evidence From a Panel VAR","authors":"C. Bannier, Thomas Heyden","doi":"10.2139/ssrn.3257002","DOIUrl":null,"url":null,"abstract":"We study the dynamics of the relationship between capital structure and performance of unlisted small and medium-sized enterprises (SMEs) in Germany. A panel vector autoregressive model allows us to account for potential endogeneity and individual heterogeneity. Our results show that there is a strong positive association between leverage and performance for small and medium-sized firms. However, we find no relation for micro-sized firms. While the smallest SMEs hence seem unable to seize the performance-enhancing effects of higher leverage, it appears important to keep credit restrictions at bay for larger SMEs.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":"18 1","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2018-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Entrepreneurship & Finance eJournal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.3257002","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 1
Abstract
We study the dynamics of the relationship between capital structure and performance of unlisted small and medium-sized enterprises (SMEs) in Germany. A panel vector autoregressive model allows us to account for potential endogeneity and individual heterogeneity. Our results show that there is a strong positive association between leverage and performance for small and medium-sized firms. However, we find no relation for micro-sized firms. While the smallest SMEs hence seem unable to seize the performance-enhancing effects of higher leverage, it appears important to keep credit restrictions at bay for larger SMEs.
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