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Capital Structures of Small Family Firms in Developing Countries

Bas, T., Yaz Gulnur, M. & Phylaktis, K. ORCID: 0000-0001-9392-1682 (2022). Capital Structures of Small Family Firms in Developing Countries. Review of Corporate Finance, 2(4), pp. 745-790. doi: 10.1561/114.00000029


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.

Publication Type: Article
Additional Information: Copyright the authors, 2022.
Publisher Keywords: Leverage, capital structure, developing countries, small firms, family firms, family management
Subjects: H Social Sciences > HG Finance
Departments: Bayes Business School > Finance
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