The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle
Allen N. Berger
University of South Carolina - Moore School of Business; Wharton Financial Institutions Center; Tilburg University - CentER
Gregory F. Udell
Indiana University Bloomington - Department of Finance
Journal of Banking and Finance, Volume 22, 1998, pp. 613-673
This article analyzes the economics of small business finance and the private equity and debt markets in which these businesses raise funds. The framework used is a financial growth cycle paradigm, in which the optimal choice among capital structures differs over the cycle. We also show the actual capital structure of small business and how this structure varies with the size and age of the firm. In addition, we analyze a number of research and policy issues, review the relevant literature, and suggest topics for future research.
Note: This is a description of the paper and not the actual abstract.
JEL Classification: G21, G28, G34, E58, L89Accepted Paper Series
Date posted: August 26, 1998
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