Working paper/research report

The Dynamics of SMEs' Capital Structure and Performance: Evidence From a Panel VAR


Authors listBannier, Christina E.; Heyden, Thomas

Publication year2019

DOI Linkhttps://doi.org/10.2139/ssrn.3257002

Title of seriesBSFA Working Paper Series

Number in series8


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.




Citation Styles

Harvard Citation styleBannier, C. and Heyden, T. (2019) The Dynamics of SMEs' Capital Structure and Performance: Evidence From a Panel VAR. (BSFA Working Paper Series, 8). Giessen: Justus Liebig University. https://doi.org/10.2139/ssrn.3257002

APA Citation styleBannier, C., & Heyden, T. (2019). The Dynamics of SMEs' Capital Structure and Performance: Evidence From a Panel VAR. (BSFA Working Paper Series, 8). Justus Liebig University. https://doi.org/10.2139/ssrn.3257002


Last updated on 2025-21-05 at 17:13