Information Availability, Information Quality and the Financial Structure of Belgian SMEs
Small Business Economics
Finance and Corporate Governance Conference 2010
HUB RESEARCH PAPER 2009/27
23 Pages Posted: 25 Jan 2010 Last revised: 9 Nov 2010
Date Written: October 1, 2009
Abstract
In this paper we test whether the amount and/or quality of financial statement information affect the financial structure of Small and Medium Enterprises (SMEs). We explore this issue for Belgian SMEs because there are important differences in disclosure and audit requirements among them. Consistent with the traditional view that asymmetric or incomplete information restricts access to external funds, our results indicate that both the amount and the quality of financial statement information are positively related to SME leverage. In addition, we find that leverage is positively related to asset structure, growth (prospects) and median industry leverage; and negatively related to firm age and profitability.
Keywords: financial structure, leverage, SME, information asymmetry, financial statements, external audit
JEL Classification: G32, M41, M42
Suggested Citation: Suggested Citation
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