An Empirical Investigation of the Growth Cycle Theory of Small Firm Financing
Document Type
Article
Publication Date
10-1-2005
Department
Management and International Business
Abstract
This paper empirically tests the financial growth cycle model for small and medium-sized enterprises (SMEs), which postulates that as firms become larger, older, and more informationally transparent, their financing options become more attractive. We add to the literature by providing one of the first empirical tests of the model using a large, cross-sectional data set. Our results partially support the financial growth cycle model. Specifically, our results show larger firms, as measured by total number of employees, are more likely to use public equity funding or long-term debt as opposed to insider funding.
Publication Title
Journal of Small Business Management
Volume
43
Issue
4
First Page
382
Last Page
392
Recommended Citation
Gregory, B. T.,
Rutherford, M. W.,
Oswald, S.,
Gardiner, L.
(2005). An Empirical Investigation of the Growth Cycle Theory of Small Firm Financing. Journal of Small Business Management, 43(4), 382-392.
Available at: https://aquila.usm.edu/fac_pubs/2640