engleski

A model of SMEs capital structure on underdeveloped financial market

Capital structures theories developed on big companies and on developed financial markets cannot explain the decision about the capital structure made in SMEs, especially those on underdeveloped financial markets. Business eco- system characterized by weak legal protection, low institutional development and restricted access to capital are the obstacles that affect capital structure decisions in SMEs on such markets. SMEs on underdeveloped financial markets will have more long term assets in balance sheets, but also lower level of net working capital which hinders further growth and development. The aim of this study is to identify determinants that will shape the decision about capital structure of owners/managers in SMEs and to propose conceptual framework for identification of preferred sources of capital on underdeveloped financial markets. The study has been conducted on 108 SMEs in the period from 2010-2012 on underdeveloped financial market of Republic Croatia. Results of the study showed that characteristics of the market have a big impact on capital structure decision making process and that will shape the capital structure of all companies on the market. The proposed framework can help policy makers in building policy recommendations but also in shaping financial services for SME owners.

capital structure, small and medium sized companies, financial markets

nije evidentirano