Abstract

http://ssrn.com/abstract=1345895
 
 

References (23)



 
 

Citations (27)



 


 



The Capital Structure Decisions of New Firms


Alicia Robb


University of California, Berkeley - Coleman Fung Institute for Engineering Leadership; Kauffman Foundation; University of Colorado at Boulder; Federal Reserve Banks - Federal Reserve Bank of Atlanta; University of Deusto - Basque Institute of Competitiveness; Marin Economic Consulting

David T. Robinson


Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER)

February 11, 2009


Abstract:     
This paper investigates the capital structure choices that firms make in their initial year of operation, using restricted-access data from the Kauffman Firm Survey. Contrary to many accounts of startup activity, the firms in our data rely heavily on external debt sources such as bank financing, and less extensively on friends and family-based funding sources. This fact is robust to numerous controls for credit quality, industry, and business owner characteristics. The heavy reliance on external debt underscores the importance of well functioning credit markets for the success of nascent business activity.

Number of Pages in PDF File: 34

Keywords: entrepreneurial finance, pecking order, start ups

JEL Classification: G32, M13

working papers series


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Date posted: February 20, 2009  

Suggested Citation

Robb, Alicia and Robinson, David T., The Capital Structure Decisions of New Firms (February 11, 2009). Available at SSRN: http://ssrn.com/abstract=1345895 or http://dx.doi.org/10.2139/ssrn.1345895

Contact Information

Alicia Robb (Contact Author)
University of California, Berkeley - Coleman Fung Institute for Engineering Leadership ( email )
130 Blum Hall #5580
Berkeley, CA 94720-5580
United States
Kauffman Foundation ( email )
4801 Rockhill Road
Kansas City, MO 64110-2046
United States
HOME PAGE: http://www.kauffman.org/kfs
University of Colorado at Boulder ( email )
1070 Edinboro Drive
Boulder, CO 80309
United States
Federal Reserve Banks - Federal Reserve Bank of Atlanta
1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
University of Deusto - Basque Institute of Competitiveness
Mundaiz 50
San Sebastián, 20012
Spain
Marin Economic Consulting ( email )
United States
HOME PAGE: http://marin-economic-consulting.com/
David T. Robinson
Duke University - Fuqua School of Business ( email )
Box 90120
Durham, NC 27708-0120
United States
919-660-8023 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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