Capital Structures of Small Family Firms in Developing Countries

Bas, Tugba, Yaz Gulnur Muradoglu, and Kate Phylaktis, 2022. "Capital Structures of Small Family Firms in Developing Countries" Review of Corporate Finance 2, forthcoming

69 Pages Posted: 14 Mar 2010 Last revised: 26 Feb 2022

See all articles by Tugba Bas

Tugba Bas

Istanbul Nişantaşı University

Yaz Gulnur Muradoglu

City University London - The Business School; Queen Mary University of London

Kate Phylaktis

City University London - The Business School

Date Written: January 31, 2022

Abstract

This study uses firm level survey data to assess whether the capital structure theory is portable to small firms in developing countries and whether family ownership and management play a role in their financing decisions. Using a sample of firms from 24 developing countries from all over the world, our main results show (i) The size of the firm is an important factor in the level of leverage; (ii) Small family firms do not follow the pecking order (iii) The country of incorporation is an important determinant for the debt financing decisions of small family firms; they are sensitive to institutional characteristics, and the macroeconomic environment variables of the country; and (iv) the difference in capital structure choices is related to management styles of small family firms.

Keywords: Leverage, capital structure, developing countries, small firms, family firms, family management

JEL Classification: G3, G32

Suggested Citation

Bas, Tugba and Muradoglu, Yaz Gulnur and Muradoglu, Yaz Gulnur and Phylaktis, Kate, Capital Structures of Small Family Firms in Developing Countries (January 31, 2022). Bas, Tugba, Yaz Gulnur Muradoglu, and Kate Phylaktis, 2022. "Capital Structures of Small Family Firms in Developing Countries" Review of Corporate Finance 2, forthcoming, Available at SSRN: https://ssrn.com/abstract=1569472 or http://dx.doi.org/10.2139/ssrn.1569472

Tugba Bas (Contact Author)

Istanbul Nişantaşı University ( email )

Turkey

Yaz Gulnur Muradoglu

City University London - The Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom
+44 20 7040 0124 (Phone)
+44 20 7040 8853 (Fax)

Queen Mary University of London ( email )

Francis Bancroft Building
Mile End Road
London, E1 4NS
United Kingdom

Kate Phylaktis

City University London - The Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom
+44 20 70408735 (Phone)
+44 20 70408881 (Fax)

HOME PAGE: http://www.cass.city.ac.uk/faculty/k.phylaktis/

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