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Home List of Titles Determinants of capital structure in new ventures: evidence from Swedish longitudinal data
Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.3/5685
- Determinants of capital structure in new ventures: evidence from Swedish longitudinal data
- Ortqvist, Daniel; Masli, Eryadi K.; Rahman, Sheikh F.; Selvarajah, Christopher T.
- The early years are seen as a crucial period for the survival of ventures and yet only a limited number of studies have focused on successful new ventures when studying capital structure. Furthermore, only a few studies have included longitudinal data, tracking ventures over time, or have elaborated on the difference between short-term and long-term debt ratios when studying capital structure. In this paper, hypotheses are developed, based on capital structure theories and literature on new venture financing, and are tested on longitudinal empirical data. Results of multivariate analysis, through structural equation modeling, reveals that: (1) asset structure assists in explaining the variance in capital structure; (2) explained variance in dependent variables is decreasing for each of the four years studied; and (3) multi-group analysis reveals that the determinants influence short-term and long-term debt differently in the first four years of venture existence. Implications of this study suggest that determinants of capital structure in new ventures require theorizing of its own and demand special attention in entrepreneurial policy-making.
- Publication type
- Journal article
- Research centre
- Swinburne University of Technology. Faculty of Business and Enterprise. Australian Graduate School of Entrepreneurship
- Journal of Developmental Entrepreneurship, Vol. 11, no. 4 (2006), pp. 277-296
- Publication year
- Capital structure; New ventures; Entrepreneurship; Financing; Longitudinal study
- World Scientific
- Publisher URL
- Copyright © 2006 World Scientific Publishing.
- Peer reviewed