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

See all articles by Tom Van Caneghem

Tom Van Caneghem

KU Leuven - Faculty of Business and Economics (FEB); University of Antwerp - Faculty of Applied Economics

Geert Van Campenhout

KU Leuven - FEB@HUBrussel

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

Van Caneghem, Tom and Van Campenhout, Geert, Information Availability, Information Quality and the Financial Structure of Belgian SMEs (October 1, 2009). Small Business Economics ; Finance and Corporate Governance Conference 2010 ; HUB RESEARCH PAPER 2009/27. Available at SSRN: https://ssrn.com/abstract=1541793 or http://dx.doi.org/10.2139/ssrn.1541793

Tom Van Caneghem

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

University of Antwerp - Faculty of Applied Economics ( email )

Prinsstraat 13
Antwerp, B-2000
Belgium

Geert Van Campenhout (Contact Author)

KU Leuven - FEB@HUBrussel ( email )

Warmoesberg 26
Brussel, 1000
Belgium

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