The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle

Journal of Banking and Finance, Volume 22, 1998, pp. 613-673

Posted: 26 Aug 1998

See all articles by Allen N. Berger

Allen N. Berger

University of South Carolina - Darla Moore School of Business; Wharton Financial Institutions Center; European Banking Center

Gregory F. Udell

Indiana University - Kelley School of Business - Department of Finance

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Abstract

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, L89

Suggested Citation

Berger, Allen N. and Udell, Gregory F., The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle. Journal of Banking and Finance, Volume 22, 1998, pp. 613-673. Available at SSRN: https://ssrn.com/abstract=119288

Allen N. Berger (Contact Author)

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
803-576-8440 (Phone)
803-777-6876 (Fax)

Wharton Financial Institutions Center

Philadelphia, PA 19104-6367
United States

European Banking Center

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Gregory F. Udell

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States

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