The Capital Structure Dynamics of European Listed SMEs

Journal of Small Business & Entrepreneurship, Forthcoming

Posted: 7 Sep 2019

See all articles by Dimitris Kenourgios

Dimitris Kenourgios

National and Kapodistrian University of Athens - Department of Economics

Georgios Savvakis

Independent

Theofanis Papageorgiou

National and Kapodistrian University of Athens - Department of Economics

Date Written: April 27, 2019

Abstract

This article investigates the capital structure dynamics of European SMEs by assessing the impact of firm-specific, institutional, and macroeconomic factors over the period 2005–2015, including the European Sovereign Debt Crisis (ESDC). In this setup, we perform a dynamic panel data analysis, along with several model specifications and robustness tests on listed SMEs of EU-28, dividing them into firm categories (micro, small, and medium) and country groups (core, periphery, high technology, and new EU member countries). We find that the effect of capital structure determinants do not differ significantly across size and country groups. The results suggest that profitability, asset structure, and size have been the driving forces of listed SME’s leverage, regardless of the size of the companies and the country group. At a macroeconomic and institutional level, taxation is the most significant variable for all the subgroups. Finally, the ESDC seems to increase the leverage of the listed SMEs in the periphery and the new member states countries, leaving the core countries practically unaffected.

Keywords: financial leverage, listed SMEs, firm categories, European sovereign debt crisis, dynamic panel analysis

JEL Classification: C23, G32, L26

Suggested Citation

Kenourgios, Dimitris and Savvakis, Georgios and Papageorgiou, Theofanis, The Capital Structure Dynamics of European Listed SMEs (April 27, 2019). Journal of Small Business & Entrepreneurship, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3445630

Dimitris Kenourgios (Contact Author)

National and Kapodistrian University of Athens - Department of Economics ( email )

1, Sofokleous Str
Office 521
Athens, 10559
Greece
+30 210 3689449 (Phone)

Georgios Savvakis

Independent ( email )

No Address Available

Theofanis Papageorgiou

National and Kapodistrian University of Athens - Department of Economics ( email )

1, Sofokleous Str
Athens, GR- 10559
Greece

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