Entrepreneurs and funding decisions: evidence from Australian SMEs Online publication date: Fri, 13-Jan-2006
by Jason R. Fitzsimmons, Evan J. Douglas
International Journal of Entrepreneurship and Small Business (IJESB), Vol. 3, No. 1, 2006
Abstract: This paper investigates the decision by Small and Medium Enterprises (SMEs) to raise funding via the sale of equity. Prior theoretical and empirical work on the 'pecking order' of funding has indicated that we should not expect SMEs to prefer equity funding over internal funding and external debt, except under particular circumstances relating to the risk aversion and autonomy aversion of the owner-manager. We utilise data from the Business Longitudinal Survey undertaken by the Australian Bureau of Statistics to investigate relationships suggested by the literature. We found that only about 5% of SMEs intended to raise funds from the sale of equity. Of these, the decision to seek equity funding was significantly and positively related to the owner-manager's intention to sell the firm; to the firm's intention to increase the number of markets targeted; and to the firm's growth intentions. The decision was also negatively related to the firm being a family business.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Entrepreneurship and Small Business (IJESB):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook