Title: Capital structure analysis of MSMEs with reference to start-up and later stages

Authors: Purva Hegde Desai; Nilesh Borde; Mitesh Nagar

Addresses: Department of Management Studies, Goa University, Goa, India ' Department of Management Studies, Goa University, Goa, India ' Department of Management Studies, Goa University, Goa, India

Abstract: Micro, small and medium enterprises (MSMEs) worldwide differ on the parameters of definitions and the set of challenges faced. Although MSMEs continuously enhance the economic activity of a country, the difficulty in accessing finance slows down their growth and development. They find it more difficult to raise finance at an initial stage as compared to a later stage. Given this background, this research focuses on finding the impact of some selected factors like size and sector on the capital structure of MSMEs, in emerging economies like India. It affirms that regarding capital structure, MSMEs do not differ among themselves and can be regarded as common cohort or a single unit of analysis. The empirical testing provides evidence that capital structures of MSMEs differ across initial and later stage, with reference to sector and age classes.

Keywords: micro, small and medium enterprise; MSME; capital structure; debt equity ratio; size; sector; initial stage; later stage.

DOI: 10.1504/IJESB.2021.117344

International Journal of Entrepreneurship and Small Business, 2021 Vol.43 No.4, pp.502 - 516

Received: 22 Aug 2018
Accepted: 23 Jan 2019

Published online: 24 Aug 2021 *

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