Capital structure of UK SMEs: an integrated understanding

This study contributes with an integrated understanding of SME capital structure patterns at the nexus internal (firm-specific) and external environment determinants. The hypotheses draw on pecking order theory (POT), agency theory, business cycle theories, estimates are obtained from a data panel 424 UK SMEs, over ten-year period. Furthermore, findings discussion both static dynamic models structure. results between model qualitatively similar, illustrating that firms change their time, which is consistent POT theory. In contrast to previous choices, present reveals size relates long-term debt borrowing only in short-term, growth not positively linked gearing ratios. also offer evidence support macroeconomic conditions as having nonlinear, convex relationship ratios sample firms.